Major Indian steel manufacturers have announced an increase of around INR 500-750/t ( $6-10) in HRC & CRC prices for Jul’20 deliveries, company executives told SteelMint.
After the increase, JSW Steel’s effective price for HRC (2.5-8mm, IS 2062) is INR 36,500/t and CRC (IS 513 GR-0, 0.9 mm) is INR 41,250/t EXW Mumbai. These prices do not include an 18% GST. Effective prices for other major producers were not immediately available even though their executives confirmed price increases.
Indian domestic steel prices increased after being stable for three consecutive months as demand had cratered due to the lockdown imposed to control COVID-19 spread.
Increase in global HRC prices and slow import of HRC in India has prompted mills to lift domestic prices. Since the last three months, large import bookings of HRC have not been done in the Indian market.
China’s steel demand has been quick to recover from coronavirus-related disruptions after infections peaked in April. Higher Chinese offer prices of HRC in the export market lifted international prices over the past month.
The INR hit a three-month high of 74.50 to a dollar recently allowing mills to raise domestic prices to maintain parity with export values.
Steel producers are also facing higher costs as domestic iron ore prices have increased amid less output in Odisha and monsoon-related disruptions to mining. India’s largest iron ore producer NMDC’s Chhattisgarh mines have raised prices by INR 200-240/t w.e.f from 30th Jun’20.
Indian steel buyers may resist higher offer prices as downstream demand remains dull. Lockdown measures remain in place to some extent in several important consuming centres such as Delhi, Maharashtra and Tamil Nadu.
Dull auto sector demand, liquidity issues, shortage of labor and upcoming monsoon season may also make downstream buyers resist the HRC, CRC price hike.
In trade segment, reference prices for HRC (IS 2062, 2.5 – 8mm) are at INR 35,500-36,000/t (ex- Mumbai), INR 35,500-35,800/t (ex-Delhi), and INR 37,000-38,000/t (ex-Chennai). CRC (0.9 mm IS513 GR) prices were at INR 40,000-42,000/t (ex- Mumbai), INR 41,000-42,000/t (ex- Chennai) and INR 40,000- 41,000/t (ex-Delhi). All prices are basic and do not include an 18% GST.
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