As per market sources major Indian steel makers are planning to increase the domestic flat steel prices by INR 500-1000/MT (USD 8-16/MT) in Dec’17 amid hike in raw material prices coupled with uptrend of flat steel prices in global market.
After maintaining consistency in domestic flat steel prices since more than a month ‘s time, major Indian steel biggies are planning to raise the flat steel prices in the month of December by about INR 500-1,000/MT.
Factors that are driving Indian flat steel prices-
1.Rise in domestic iron ore prices by major miners- -Odisha based merchant miners have increased lump prices by INR 400/MT (USD 6) and fines prices by INR 200/MT (USD 3) with effect from today.
2.Hike in Coking coal prices– Coking coal prices have also registered the hike amid tight supply of cargoes due to congestion in the major coal handling port terminals in Australia.On the other side the demand from India and major nations is positive as they are actively importing coking coal for restocking their inventories amid arrival of winter season in Australia. For Indian buyers, Premium HCC is heard at USD 219.50/MT on CFR India basis which is equivalent to USD 206.5/MT FoB Australia.
3.Upward trend in global flat steel prices-Chinese flat steel prices also started moving upward over domestic gains.Also after the announcement of production cut from the month of Nov’17 to March’18 will lead to shortage in supply which has compelled the steelmakers in China to increase the flat steel prices in domestic as well as in international market.Also South Korean mills are anticipating rise in HRC export offers in global market.
However this week trade reference prices (basic) for HRC (IS2062) 2.5 mm-8 mm are assessed in the range of INR 39,000-39,250/MT (ex-Delhi), INR 39,000/MT (ex-Chennai) and INR 38,500/MT (ex-Mumbai).The prices mentioned above are basic prices excluding GST @ 18%.
As per SteelMint assessment current reference prices (basic) for CRC (IS513) 0.9mm is hovering in the range of INR 44,000/MT (ex-Delhi), INR 43,000 – INR 44,000/MT (ex-Chennai) and INR 43,000/MT (ex-Mumbai).The prices mentioned above are basic prices excluding GST @ 18%.
However, few market participants are skeptical whether this price hike will be absorbed by the market or not. Since past one month domestic demand for flat steel has not picked up significantly and traders reported decline in sales volume.
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