The month of August was quite supportive for Indian steel industry. Flat and long steel products prices in August jumped up by INR 1,000-1,500/MT and INR 500-1,000/MT separately.
Few major steel companies, including JSW Steel, Essar Steel, SAIL and Tata Steel had revised their prices monthly.
Sharp rise in raw material prices and a revival in demand are the two most prime cause of price rise throughout the month.
Five major factors
1. Increasing exports: Steel export from India increased significantly in Aug’16. As per the data available with SteelMint, about 650,000 MT steel (HRC, CRC, GI, Coated) has been booked by major Indian steel players. These numbers were approximately 200,000 MT in July and 210,000 MT in June.
Source: Customs Data; SteelMint Research
2. Falling imports: Flat steel import to India reduced significantly to 315,000 MT in Aug’16 from 360,000 MT in Jul’16. The imposition of anti-dumping and safe guard duties by the Indian government to protect domestic steel makers are is the key reasons behind fall of 3% in monthly import during Aug’16.
Source: Customs Data; SteelMint Research
3. Rising coking coal prices: Supply tightness and strong demand in global market have been influencing and supporting coking coal market constantly. The latest import offers of the Premium HCC have risen to USD 144/MT, CFR India; increased by 22% in the 3rd week of this month.
Meantime, Australian suppliers offered the coal variants at USD 128/MT (Premium HCC) and USD 128/MT (64 Mid Vol HCC) respectively on FoB Australia basis.
Source: SteelMint Research
4. Stable Indian currency: In the month of Aug’16, Indian currency Rupee was trading at an average of 66.83 against USD. This somehow supported Indian domestic market. However in today’s morning trade, INR has depreciated by 2 paise to 66.94 against USD on bouts of dollar selling by banks and exporters amid higher equities.
INR Vs. USD in Aug’16
| Week | INR |
| 1 Jul’16 | |
| Week 1 (01 Jul 2016) | 67.26164 |
| Week 2 (08 Jul 2016) | 67.07587 |
| Week 3 (15 Jul 2016) | 66.96631 |
| Week 4 (22 Jul 2016) | 67.13376 |
| 29 Jul’16 | |
| Week 1 (29 Jul 2016) | 66.71673 |
| Week 2 (05 Aug 2016) | 66.69703 |
| Week 3 (12 Aug 2016) | 66.7493 |
| Week 4 (19 Aug 2016) | 67.008 |
| 26 Aug’16 | |
| *Week 1 (26 Aug 2016) | 67.03415 |
Source: Oanda
5. Seasonal demand: Amid monsoon and festive mood in India, buying activities become dull during July-August. But with the end of this, there is revival in buying activities and prices started to pick up.
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