Indian steel majors have announced an interim hike of up to INR 1,250/t ($15) for hot rolled coils (HRC) and cold rolled coils (CRC) earlier this week. Improved global market sentiments, absorption of the previous price hikes and raw material prices have played a pivotal role behind the pricing policy of Indian manufacturers.
Effective list prices from mills for mid-January 2023 sales:
- JSW: HRCs at INR 57,000/t ($700) ; CRCs at INR 63,750/t ($783)
- AMNS: HRCs at INR 56,750/t ($697) ; CRCs at INR 63,500/t ($780)
- JSW: HRCs at INR 57,000/t ($700) ; CRCs at INR 63,750/t ($783)
- Prices are exy-Mumbai, exclusive of GST at 18%.
SteelMint’s weekly assessment for HRCs increased by INR 1,000/t ($12) to INR 57,000-58,000/t ($700-712), whereas CRCs rose by INR 1,500/t ($18) to INR 63,000-64,000/t ($774-786) as on 18 January.
All the prices mentioned above are exy-Mumbai, excluding GST at 18%. (INR 1 = USD 0.0122801 ; USD 1 = INR 81.4323)
Factors behind the increase in list prices by producers:
1. Improved global market sentiments: SteelMint’s HRC (SAE1006) export index was assessed at $633/t FOB east coast on 17 January, an increase of $18/t on the week. Overseas market sentiments stand improved and there have been continual increase in overseas export offers. For instance, HRC offers to Middle East (ME) have seen a rally over the past couple of weeks from both India and China.
However, the overseas market activities have slowed down a bit amid the Lunar New Year holidays in China and the Tet holidays in Vietnam which spans from 20-27 January.
Chinese mills have been packed for March 2023 deliveries and shall raise their quotes further for April post-Lunar New Year holidays. Also, mills shall come up with higher offers post-holidays and the sentiments should stay buoyant, infromed a reliable EXIM trade source.
These lend additional benefits to Indian mills to scout for the March shipments in the overseas market with a slack in competition from China. This in turn shall help mills ease off inventories in overseas markets along with the domestic market.
2. Raw material prices on a rise: The key steel making raw materials have been on a rally since mid-November 2022. This is among the leading reasons for the mills to raise their list prices apart from the improved global market sentiments.
SteelMint’s weekly Odisha iron ore fines Fe 63% index rose by INR 450/t ($6) to INR 5,200/t ($64) ex-mines as on 14 January 2023, as compared with INR 4,750/t ($58/t) as on 31 December 2022, as per SteelMint’s records.
Similarly, Australian-origin premium HCC coking coal prices stood at $321/t CNF India on a weekly average basis for the week ended 14 January. Prices increased by $19/t against weekly average of $302/t CNF India for the week ended 31 December 2022.
3. Imports turn unfavourable: Prices of HRCs on the global trade platform have been on a rise since end-November 2022. The landed cost of imported HRCs from FTA countries was at a discount of around INR 8,300/t ($102) in November, is around INR 1,700/t till the last assessment on 18 January.
Furthermore, due to currency fluctuations, higher payments often have to be made for imports. For instance, in November (average), 1 USD was trading at INR 81.612, which in January is around INR 82.153. A point to note here is that the January average is computed for 18 days in line with the date of assessment i.e. 18 December, 2022.
Leave a Reply