Increase in railway freight charges in the range of INR 100-300/MT from October- March and 20% safe guard duty on imports are likely to compel domestic manufacturers to increase flat steel prices.
Every year Indian railways charge extra freight on all commodities during peak season which is known as Busy Season Charge. This freight hike is applicable for ‘April-June’ and ‘Oct-March’. An additional charge of 15% is paid on basic freight rates.
With this rail transportation cost is likely to increase in the range of INR 100-300/MT. The freight hike will add to the cost burden of Indian HRC manufacturers also.
As per trade sources domestic manufacturers are anticipated to increase their HRC prices in the range of INR 500-700/MT.
“Price hike HRC is anticipated only to cover freight increase burden. Otherwise increase in HRC prices is not viable for domestic players owing to continuous supply of cheap HRC exports from China”, said an official of Bhushan Steel.
Current offers for 2.5 mm (IS2062 grade) HRC is being assessed at INR 33,000/MT (ex-Mumbai and Chennai) and INR 33,500/MT (ex-Delhi and Kolkata). All prices include excise of 12.50%.
20% provisional Safeguard duty announcement on 15 Sep’15 has brought some stability in domestic HRC prices. Market sources have informed SteelMint that some restrictions in imports have also been registered post safeguard duty. This has also made buyers to look for domestic sourcing and hence increase in volumes for Indian steel makers.
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