Indian steel producers lifted flat steel prices by INR 2000/t ($27/t) on revival in domestic demand
Major Indian steel manufacturers have raised flat steel prices by INR 2000/t w.e.f from 1st Aug’ amid steep hike in global offers and improved demand in the domestic market.
Mills had raised list prices of HRC and CRC twice last month, by around INR 500-750/t in early-July and by INR 500-1000/t from mid to end of Jul’20.
After the latest increase in price, JSW Steel’s effective price for HRC (2.5-8mm, IS 2062) is INR 38,500/t and CRC (IS 513 GR,0.9 mm) is INR 43,500/t EXW Mumbai. Also, AM/NS India raised steel prices by INR1500/t and are offering HRC in range of INR 38,500-39,500/t (ex- Mumbai) andCRC at INR 43,500-44,000/t (ex-Mumbai).These prices doesn’t include GST at 18%.
Meanwhile, other steel mills like Tata Steel, SAIL and JSPL also increased list prices by a similar amount.
Factors driving steel prices are mentioned below:
1. Better demand in domestic market- Traders liquidated stocks in Apr-Jun and avoided
large-volume bookings due to frequently-announced lock-downs. However, with the
announcement of unlocking in various states, traders are actively making fresh
bookings since they have limited stocks in hand.
On the other hand, there is a shortage of thinner-gauge material for prompt
delivery since most of the mills are busy with exports of thicker gauge HRC
(2.5mm).Thus supply-demand mismatch kept the prices on higher side.
2. Hike in export offers – Indian steel mills have raised HRC export offers to
$485/t CFR basis for Sep shipments last week. Offers in the preceding week were
around $ 475/t CFR basis for Jul- Aug shipments.
3. Hike in iron ore prices- NMDC Ltd, India’s largest iron ore producer, increased
prices by 8-9% in late-July.SteelMint’s Odisha iron ore price index increased by around INR 500/t m-o-m in Jul’20 on tight availability as majority of auctioned mining leases are yet to resume production.
4.Increase in sales volumes – JSPL sales volume rose by 29% to 0.637 mn t in Jul’20 as compared with 0.493 mn t in Jul’19. SAIL has achieved highest ever sales in the month of Jul ’20 at 1.58 mn t, a sharp growth of about 50% y-o-y over 1.05 mn t in July ’19.
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