- Mills raise list prices by up to INR 1,500/t ($18/t)- fourth hike in January
- Trade reference prices rise to 8-month high
- Increase in raw and coating materials prices
- Export opportunities keep sentiments buoyant
Indian manufacturers of coated flat steel products announced their fourth price hike in January. The latest hike is of about INR 750-1,500/t ($9-12/t), effected earlier this week. Increasing raw and coating materials prices, along with better export opportunities, are among the leading factors behind the third hike. Trade-level prices have also hit an eight-month high, hovering close to levels last seen in early June 2022.
Subsequent to the revision, list prices of early-January sales are as below:
- JSW Steel:
GP (0.8mm, 80gsm): INR 69,550/t ($854/t)
PPGI (0.5mm, 90gsm): INR 79,500/t ($976/t) - AM/NS India:
GP (0.8mm, 80gsm): INR 69,500/t ($853/t)
PPGI (0.5mm, 90gsm): INR 80,000/t ($982/t) - Prices mentioned are on an exy-Mumbai basis, excluding GST at 18%.
Why did mills raise prices?
1. Raw material prices rise: The prices of raw materials form a major share of the cost of production. On a monthly average basis, special high grade zinc ingot (ingot, Zn 99.99%) prices stood at around INR 291,700/t ($3,587/t) exw-Delhi till 27 January. This hovered at around INR 284,400/t ($3,500/t) exw-Delhi in December 2022 and INR 271,400/t ($3,340/t) exw-Delhi in November 2022, as per SteelMint records.
Meanwhile, trade-level prices of cold rolled coils (CRCs), a major substrate material required for manufacturing value-added coated steels, are also on a continual ascent. The trade prices of CRCs (IS513 Gr O, 0.9mm) stood at INR 64,700/t ($794/t) exy-Mumbai as on 18 January, higher by INR 1,200/t ($15) w-o-w. Moreover, the same is up by INR 5,500/t ($68/t) in contrast to INR 59,200/t ($727/t) exy-Mumbai assessed on 28 December 2022.
2. Supply issues emerge: Domestic market participants have been facing supply issues lately. An increase in export volumes and deals has led to a short supply in the domestic trade channel, informed a source.
There has been an increase in export opportunities witnessed since the removal of the 15% export duty on clad or plated flat steel products. European buyers booked 125,000-130,000 t of coated flat steel products for January and February deliveries, SteelMint had reported last week.
Moreover, exports of galvanised steel increased to 128,907 t in December 2022. This had been on a continual decline since June 2022 (61,125 t) till November (7,404 t) after the levy of the export duty in late May, as per data maintained with SteelMint.
“Indian steel mills had withdrawn their offers for galvanised steel this week, anticipating an increase in global export offers as the Chinese mills resume post-holidays,” informed a reliable source. Mills are likely to float higher offers next week, he added.
SteelMint’s weekly assessment of galvanised plain (GP) coils (0.8mm, 120gsm) stood at INR 72,500-73,500/t ($890-902/t), while pre-painted galvanised iron (PPGI) (0.5mm, 90gsm) prices were at INR 79,500-80,500/t ($976-988/t) on 27 January. Prices are on an exy-Mumbai basis, excluding GST at 18%. (INR 1 = USD 0.0122772 ; USD 1 = INR 81.4518)
3. End-user industries show improved performance: End-user industries for coated steel have also started expediting their activities with the fiscal year nearing its end. Construction and infrastructure, and power generation and distribution segments have already started to show improved performance. Capacity additions in the green energy segment continue which has led to increase in procurement from this segment, hinted a source. Among them, the wind power segment saw an addition of 1.337 MW m-o-m to 63,303 MW in December 2022. Similarly the solar power capacity was recorded at 49,374 MW and wind power at 41,930 MW in December.
An addition of 1,006 kms of national highways in December 2022 also relays improved construction speed by the NHAI compared with 706 km added in November, as per data released by the Ministry of Road Transport and Highways (MoRTH).
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