After the price surge of INR 500-1,000/MT announced by the Indian steel majors in the first week of May’16, prices have remained unchanged since then.
Current offers for 2.5mm HRC are assessed at INR 35,000-35,500/MT (ex-Delhi), INR 34,500-35,000/MT (ex-Mumbai) and INR 36,000-36,500/MT (ex-Chennai). All prices include excise of 12.5%.
Offers for 0.9mm CRC are assessed at INR 41,000-41,500/MT (ex-Delhi), INR 40,500-41,000/MT (ex-Mumbai) and INR 41,000 (ex-Chennai). Prices include excise of 12.5%.
As per trade sources, buyers didn’t absorb the price hike announced by the manufacturers due to sluggish demand and traders were forced to sell their products at a discount of INR 500-1,000/MT. The manufacturers are currently giving discount and rebates on bulk purchases.
The key reasons for subdued demand for steel in India are slow down in construction activities and labour migration during summers. Due to scarcity of water in the country, many construction projects have been stalled thus impacting steel demand. Also during summers majority of labourers migrate to their home town for two to three months resulting in shortage of labour.
“Manufactures were planning another price hike in the month of May and June but looking at the market response of recent price hike, it is unlikely that manufactures may announce a further price rise.”, quoted a trader based in Mumbai.
“Construction activities are solely dependent upon monsoons right now. As monsoon predictions are good this year, demand may pick up post rainy season”, quoted a trader based in Delhi.
HRC/CRC Prices as on 1 Jun’16
|
Particulars |
HRC |
CRC |
| Ex-Mumbai | 35,000-35,500 | 40,500-41,000 |
| Ex-Delhi | 34,500-35,000 | 41,000-41,500 |
| Ex-Chennai | 36,000-36,500 | 41,000 |
Prices Including Excise Duty of 12.5%
Prices in INR/MT
Source: SteelMint Research
Leave a Reply