After the Indian manufacturers announced price hike of INR 1,500-2,000/MT for flat products last week, current week opened with unchanged prices.
Current offers for 2.5mm HRC are assessed at INR 36,000-36,500 (ex-Mumbai and Delhi). While CRC offers are heard to be at INR 40,500-41,000/MT (ex-Mumbai and Delhi). Prices include excise of 12.5%.
Indian government’s announcement of anti-dumping duty on flat steel imports in the first week of Aug’16 has led to effective increase of INR 2,000-2,500/MT till date.
“Although there is no major shift in the domestic demand, the market has accepted recent price hike and manufacturers are hopeful that further increase in prices will also be accepted by the market in the wake of positive outlook for demand in upcoming months”, quoted a trader based in Delhi.
There are strong speculations in the market that Indian manufacturers may increase the flat products prices further by INR 500-1,000/MT in the second half of Sep’16.
The drastic increase in raw materials such as iron ore and coking coal prices has also prompted Indian manufacturers to increase flat products prices.
As per market sources, the steel production cost has gone up by INR 5,000/MT in last eight months. While coking coal prices have gone from USD 75/MT to USD 127/MT since January, iron ore prices have jumped up by 19% in last eight months. Thus, the manufacturers are compelled to pass on this incremental cost burden on the consumers in the form of price hike.
Also, as now imports are almost restricted into India, domestic manufacturers have enough scope to increase their products prices amidst weak demand.
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