AM/NS India raises HRC and CRC price by up to INR 4,500/t ($61)

Major Indian steel mill announced a steep hike in its HRC and CRC prices for May delivery on the backdrop of bullish trends in the global market.

Also, Indian steel prices are still at discounted levels as compared to imported HRC from China and FTA nations.

Effective prices by Indian steel mill-

The revised price stands at around INR 67,000-67,500/t for HRC and 80,000-80,500/t for CRC for May delivery, SteelMint learned from trade channels. The prices mentioned are on the exy-Mumbai basis, excluding GST @ 18%.

Factors driving steel prices:

1. Indian HRC export price increases in a recent deal for Vietnam- Recently major Indian private Steelmkaer booked 20,000 t HRC to Vietnam at $975/t CFR basis. New offers are at $1000/t CFR basis post announcement of the removal of the Chinese export rebate.

Indian HRC export offers to the Middle East at $980-985/t CFR, and for Europe at $1050/t CFR for June shipments. Along with this, last week major Indian steel mills have collectively booked around 50,000 t CRC for Europe at $1,330-1,350/t CFR for May end shipments.

2. Absence of cost-effective imports- Major exporting nations mainly Japan, China, and South Korea have significantly raised HRC export. Major Chinese tier -1 steel mills are offering HRC at around $920-940/t FoB, meanwhile Japanese and Korean mills are offering at around $1000/t CFR basis. Thus, imports are not a viable option at the moment for domestic traders which creates enough opportunity for steel mills to raise prices.

Will higher prices continue to sustain in domestic prices-

• Maruti Suzuki India Limited (MSIL), has decided to advance its maintenance shutdown in the Haryana factory originally scheduled for June, to 1st to 9th May to make oxygen available for medical needs. Production in all factories shall remain closed during this period.
• Haier India’s plant at Pune has not been operational due to lockdown restrictions imposed by the Maharashtra government.
• Panasonic India has also paused manufacturing at its plant at Jhajjar, Haryana for a week.
• Traders in the various region are of the view that amid lockdowns inquiries are limited and higher prices are difficult to absorb in the market.
• Disruption in the supply chain due to Lockdown announced in various states.
• Drop-in consumption due to lower sales.

Outlook-

Acceptance of elevated prices in the local market continues to remain a question. However, the announcement of China’s removal of the HRC rebate tax gives enough headroom to the Indian steel mill to lift prices further in the domestic market. Also, other major mills are likely to announce price hike in the next week.