India’s Few Major Mills Hike Flat Steel Offers by INR 500/MT (USD 8) for June – Sources

In line with SteelMint’s previous report, few major Indian mills like SAIL & JSW Steel are heard to have announced price hike of INR 500/MT (USD 8) today. SteelMint assessed following reasons behind hike in offers: .

1.Hike in iron ore prices by NMDC- India’s largest iron ore miner NMDC has raised prices in Chhattisgarh and Karnataka e-auctions. NMDC Kumaraswamy has increased iron ore base prices by INR 50/MT in fines and around INR 100/MT in lumps prices in Karnataka E-auction. On 23rd May, NMDC Chhattisgarh increased prices by INR 100-170/MT.Thus increased raw material cost pushes steel manufacturers to increases prices in domestic flat steel prices.

2. Fewer HRC import bookings- Major exporting nations like Japan and South Korea have limited allocations for exports over strong domestic demand. And imports from China are not viable at current levels. The market participants shared that limited HRC import bookings of around 20,000 MT from Indonesia were heard at levels of USD 650/MT, CFR for June shipment. Apart from this no significant import bookings were heard.

3. Indian auto companies record strong sales in May – Indian auto makers continue to show robust growth in sales volumes in May’18. Maruti Suzuki India Limited sold a total of 172,512 units in May’18 compared to 136,962 units in May’17, thus recording an yearly growth of 26%. In first two months of FY19 (Apr-Mar’18) company’s sales have increased by 19.9% Y-o-Y.

After price hike JSW Steel’s HRC (2.5 mm- 8mm,IS2062) is around INR 47,000-47,500/MT in Mumbai. Also government owned PSU – SAIL is quoting HRC prices at around INR 46,500-47,000/MT in Chennai.The prices mentioned above are basic prices for Mumbai region excluding GST @ 18%.

Similarly prices of CRC (IS513) 0.9mm offered by major mills are : JSW is offering CRC in range of INR 52,000-52,500/MT in Mumbai .And SAIL is offering CRC at INR 52,500/MT in Chennai.The prices mentioned above are basic prices for Mumbai region excluding GST@18%.

Increased prices have not yet passed on to traders market.Previously in the month of May, mills announced a price hike of INR 750-1000/MT (USD 11-15).However later in the month, prices in traders market weakened by INR 500/MT amid limited trade activities.Thus outlook for price acceptance over slow demand in traders market remains uncertain.