HRC/CRC prices have surged by INR 1,000-1,500/MT after the Indian government imposed MIP on 173 steel products including HRC/CRC on 5 Feb’16.
As per trade sources, Indian steel majors like JSW, SAIL and Tata Steel have increased their HRC and CRC prices on Monday after the MIP’s announcement on last Friday.
Current offers for 2.5 mm HRC (IS2062) are assessed at INR 29,000-29,500/MT (ex-Mumbai), INR 31,000- 31,500/MT (ex-Delhi) and INR 31,000-31,500/MT (ex-Chennai). All prices include excise of 12.5%.
Meanwhile, 0.9 mm CRC offers are heard at INR 34,000/MT (ex-Mumbai), INR 35,000/MT (ex-Delhi) and INR 35,000 (ex-Chennai). Prices include excise of 12.5%.
Domestic steel market, which had been suffering since last one year due to presence of cheap imports especially from China, Korea, Japan and Russia, heaved a sigh of relief after MIP announcement. Flat steel prices in Indian market have fallen by INR 10,000-12,000/MT in last one year.
MIP decided by government on HRC is USD 445/MT and on CRC is USD 560/MT. This MIP is applicable for period of 6 months, after which government will analyse the domestic market once again. After this, if MIP is found insufficient to improve domestic market situation, the government will consider imposing anti-dumping duties on steel imports, as mentioned by Steel Secretary, Nirmala Sundarajan.
Domestic prices cannot increase arbitrarily
As per market sources, MIP announcement won’t lead to haphazard increase in domestic steel prices in India. This is because there is intense competition in Indian steel circuit and also with incremental capacities likely to be added by Indian steel majors this year. Prices will be dependent only upon domestic demand and how much Indian market is ready to absorb.
“Prices will depend a lot upon market demand. Although, imports will be curbed to a good extent, we won’t be able to increase prices to previous level until there is enough demand for steel in the market”, quoted an executive of SAIL.
“Price recovery will be a gradual process. The duty is for 6 months, there will be a lag of those products, which have been already billed for landing in the country. Also, by the end of the 5th month of the 6-month period, buyers will wait for the minimum import price to go out before placing fresh orders”, said Ravi Uppal, managing director and group chief executive officer, Jindal Steel and Power Ltd.
Current flat steel prices
| Particular | Delivery | Size,Grade | Currency | Market Price | Taxes |
| HRC | Ex-Mumbai | 2.5 mm | INR | 29,000-29,500 | Incld Excise of 12.5%, VAT extra |
| Ex-Delhi | 2.5 mm | INR | 31,000-31,500 | Incld Excise of 12.5%, VAT extra | |
| Ex-Chennai | 2.5 mm | INR | 30,500-31,000 | Incld Excise of 12.5%, VAT extra | |
| CIF India (From China) | 2 mm,SS400 | USD | 300-305 | ||
| CIF India (From Korea/Japan) | 2 mm,CR Grade | USD | 310-320 | ||
| CRC | Ex-Mumbai | 0.9 mm | INR | 33,500-34,000 | Incld Excise of 12.5%, VAT extra |
| Ex-Delhi | 0.9 mm | INR | 35,000-35,500 | Incld Excise of 12.5%, VAT extra | |
| Ex-Chennai | 0.9 mm | INR | 35,000-35,500 | Incld Excise of 12.5%, VAT extra | |
| CIF India (From China) | 0.9 mm | USD | 320-330 | ||
| CIF India (From Japan/Korea) | 0.9 mm | USD | 360-380 | ||
| Plates | CIF India (From China) | A-36 | USD | 300-310 | |
| CIF India (From Indonesia) | A-36 | USD | 290-295 |
Source: SteelMint Research
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