During the past week, the Indian domestic flat steel market has continued to witness the upward trend seen in previous weeks. Indian flat steel producers have increased their local hot rolled coil (HRC) offers by approximately three percent as compared to last week to INR 35,000-35,500/mt ($767-778/mt). Steelmakers' domestic cold rolled coil (CRC) and hot dip galvanized (HDG) coil prices have continued to rise as well. The main reason behind the recent flat steel price hikes appears to be the general rising trend in the global steel markets, which is driven by rising production costs.
In line with the rapid price increases in the Indian flat steel market, import offers to the country have also been moving up. Chinese HRC offers to the Indian flat steel market have been at $730-740/mt CFR this week, though the price idea of Indian buyers has remained at $700-720/mt CFR, and so only a few transactions have been concluded.
On the other hand, SteelOrbis has learned from market sources that Indian steelmakers have managed to conclude some flat steel transactions to the export markets in the past week. Indian steelmaker Essar Steel has concluded a hot rolled plate (HRP) transaction to Europe at the level of €610/mt ($816/mt) CFR to a European port, for February shipment. Major Indian steelmakers including Steel Authority of India Limited (SAIL), JSW Steel, TATA Steel and Essar Steel have been issuing flat steel offers to both their domestic market and also to export markets such as the Middle East and Europe. The recent steep flat steel price hikes in the international markets have led buyers to anticipate further price increases in the near future. In the meantime, flat steel offers are more frequently heard than actual transactions.
The most decisive factor in the recent flat steel price increases have been production costs. The significant scrap price hikes in India, as well as the shortage of coking coal supplies for the world steel industry, are the main reasons behind the rising production costs. If the coking coal supply shortage prevails and if the demand supporting the market recovery continues in the coming weeks, flat steel prices are very likely to continue increasing.
$1 = INR 45.615