The price increases observed in the global steel markets as the year 2010 draws to a close have also influenced the Indian flat steel market. SteelOrbis has learned that, following significant price increases in Chinese flat steel offers to India, Indian steelmakers have finally taken action, pushing up their flat steel offers for the domestic market by INR 500-750/mt ($11-17/mt).
Indian state-owned steelmaker SAIL has lifted up its local hot rolled coil (HRC) offers to the base price level of INR 32,000/mt ($706/mt). The price levels of SAIL's products may be viewed as the base price levels for Indian mills' domestic offers. SteelOrbis is informed that other Indian producers' domestic offers are INR 500-1,000/mt ($11-22/mt) higher than SAIL's sales prices.
In the Indian spot market, HRC offers given via traders are currently standing at INR 33,000-33,500/mt ($728-739/mt). However, market demand for this price level has remained weak.
SteelOrbis has heard that continuous weakness of domestic demand has caused Indian producers to turn towards the export markets. Indian mills Essar Steel and JSW, having observed the steep price hikes in Europe, last week concluded HRC and steel plate transactions to this region.
Witnessing the rise in its domestic prices, China has pushed up its HRC offers to India to the price range of $670-680/mt CFR. However, due to the weakness of Indian domestic demand, orders for these offers are virtually nonexistent. Meanwhile, no offers have been heard from any CIS countries, such as Russia or Ukraine.
The Indian hot dip galvanized (HDG) steel market has also remained sluggish. SteelOrbis has learned that Chinese export offers to India for 1.2 mm 275 gr/m² zinc coated hot dip galvanized (HDG) coil are standing at $860/mt CFR, for January shipments, while offers given from South Korea for 0.45 mm 100 gr/m² zinc coated hot dip galvanized (HDG) coil are standing at the price range of $900-910/mt CFR, for late December shipments.
Seeking to maintain their margins, local Indian producers are tending to increase their flat steel sales prices, in the context of the rising global steel markets and higher production costs. Meanwhile, as the end of the year approaches, buyers may be obliged to maintain or even increase their inventory levels, also due to the possibility of further price increases. These buyers are therefore looking for workable price levels. On the other hand, the rapid increase in activity in the Indian automotive industry is foreseen to continue also in the coming year. Given all these factors, market players have told SteelOrbis that they believe that demand in the Indian flat steel market will increase and that prices will continue to rise in the month of January.
$1 = INR 45.355