- Mills raise list prices by INR 500/t ($6/t)
- Trade-level HRC prices rebound in key markets
- Raw material costs a concern
- Market abuzz with likely price increase for Mar’23
Indian private steel majors announced an increase of INR 500/t ($6/t) in HRC list prices earlier this week. Uptrend in global HRC prices and rising raw material costs remained the key reasons behind the price hike.
Subsequent to the revision, the list prices for HRC and CRC are as below:
AM/NS India (w.e.f. 20 February, 2023)
- HRC (IS 2062,2.5-8mm)- INR 60,000/t ($724/t)
- CRC (IS513 Gr O, 0.9mm)- INR 67,500 ($815/t)
JSW Steel Ltd. (w.e.f. 22 February)
- HRC (IS 2062,2.5-8mm)- INR 60,000/t ($724/t)
- CRC (IS513 Gr O, 0.9mm)- INR 67,000/t ($809/t)
Prices mentioned above are exy-Mumbai, excluding GST at 18%.
SAIL and Tata Steel Ltd along with the above too are likely to announce price hikes for March sales soon, hinted sources.
SteelMint’s benchmark assessment (weekly) for HRC rose by INR 1,000/t ($12/t) to INR 59,000-60,000/t ($712-724/t) exy-Mumbai as on 22 February. CRC (IS513 Gr O, 0.9mm) prices increased by INR 300/t ($4/t) to INR 64,000-65,000/t ($772-785/t) exy-Mumbai. Prices exclude GST at 18%. (1 INR = USD 0.0120697 ; 1 USD = INR 82.8519)
Factors behind price hike:
1. Raw material prices rise: Prices of major steelmaking ingredients like iron ore and coking coal have been on a rise since November and December, respectively. SteelMint’s Odisha iron ore fines (0-10mm, Fe 63%) was assessed at INR 5,750/t ($69/t) ex-mines as on 18 February, contrasted against INR 5,100/t ($62/t) ex-mines in early January.
Prices of imported hard coking coal (premium HCC, Australian-origin) averaged at $396/t CNF India for the week ended 18 February. Average prices of the same were around $340/t CNF for the week ended 28 January and $315/t CNF for that ended on 7 January.
2. Strengthening global HRC prices: Prices of HRC on the global platform are also on a rise since the beginning of Calendar Year 2023 (CY 2023). The world’s major steel producer, China has been offering HRC for export at $675/t FOB Rizhao as per the recent assessment on 21 February, up by $65/t from the levels in early January. Moreover, SteelMint’s India HRC export index increased by a steeper 108/t to 708/t FOB east coast India in the same period. Meanwhile, Japanese steel producers have been quoting $720-725/t CFR Vietnam, up by $20-25/t against the previous week.
Furthermore, the removal of 15% export duty on non-alloyed clad or plated steel products on 19 November 2022 reopened the European market for exports. Export deals for Indian HRCs and CRCs have been getting concluded since then. The recent export deal was for 40,000-50,000 t HRC (S275), concluded at $790-800/t CFR Europe for April shipment in the preceding week. Fresh offers stand at around $800-810/t CFR Antwerp.
Also, domestic HRC prices have been increased by Baosteel (China) and Formosa Ha Tinh (Vietnam) earlier this month, while Tokyo Steel (Japan) kept it unchanged. This turned out to be another factor supporting an increase in prices by Indian mills.
Outlook
Trade-level HRC and CRC prices are likely to increase in the near term amid an anticipated recovery in demand. Although January and February of this last quarter of the ongoing fiscal have not seen a surge in market activities, sources are of the view that the market is likely to gain momentum in March. The growth in export opportunities and rise in HRC prices globally are other key factors that might push mills to raise prices.
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