India’s coated flat steel producers increased their list prices by INR 500/t with effect from 20 December. Meanwhile, trade reference prices have increased slightly this week with higher prices quoted by distributors.
Inflow of inquiries have started increasing, but are still slow in maturing into trade deals, sources informed. Furthermore, the market is abuzz with news of a further price hike for early-January 2023 sales.
Subsequent to the revision, the list prices w.e.f. 20 December 2022 are as below-
- JSW:
GP (0.8mm, 80gsm): INR 64,450/t
PPGI (0.5mm, 90gsm): INR 74,500/t - AM/NS India:
GP (0.8mm, 80gsm): INR 63,750/t
PPGI (0.5mm, 90gsm): INR 74,750/t - Prices mentioned are on an exy-Mumbai basis, excluding GST @ 18%.
SteelMint’s weekly assessment of galvanised plain (GP) coils (0.8mm, 120gsm) stood at INR 63,000-64,000/t while that for pre-painted galvanised iron (PPGI) (0.5mm, 90gsm) is at INR 71,500-72,500/t as on 23 December. Prices mentioned are on an exy-Mumbai basis, excluding GST @ 18%.
Why are mills increasing prices?
1. Increase in consumption amid declining prices: Coated steel prices started dropping close to Diwali holidays towards end-October amid weak sentiments and subdued buying interest. Trade prices of GP (0.8mm, 120gsm) dropped to INR 62,400/t on 16 December, which were at INR 67,100/t on 21 October.
The gradual decline in prices during the period led to an increase in consumption. For instance, the apparent consumption of coated flat products showed an increase of 87.4% m-o-m in November to 1.276 mnt which was mere 0.676 mnt in October. Moreover, in April-November 2022, the aggregated consumption stood around 5.116 mnt, up by 15.6% y-o-y, as per Joint Plant Committee data.
2. Global prices on a rise: Global coated steel prices are on a rise over the past four weeks. Chinese hot-dipped galvanized (HDG) export offers have risen to $720/t FOB as on 22 December, up by $52/t as against $668/t FOB on 24 November. However, Indian HDG export offers have remained pegged at the levels of $810-820/t FOB for the past five consecutive weeks, as per SteelMint records. Furthermore, the removal of export duty on non-alloyed steel has opened up the opportunities for Indian steel mills for exports. Another major reason which would help in balancing the supply-demand dynamics in the domestic market. It can be recalled that exports dropped steeply during the May-November 2022 amid the export duty which had pushed mills to take maintenance shutdowns to counter increased supplies in the domestic market.
3. Demand from EU to rise: There have been export bookings to European countries reported in the aftermath of the export duty removal. “Some 50,000-60,000 t of coated steel were heard booked for exports for end-December and January deliveries post 19 November,” informed reliable sources. Meanwhile, it is expected that more export bookings are likely to be done in the near term by Indian mills, they added.
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