Trading prices and volumes in the local Indian hot rolled coil (HRC) market have continued to gain momentum amid increased restocking by market intermediaries and end-users in anticipation of a second base price hike in October, SteelOrbis has learned from trade and industry circles.
The traded HRC price is up INR 3,000/mt ($40/mt) to as high as INR 70,000-72,000/mt ($931-957/mt) ex-Mumbai, amid high levels of restocking and market expectations of a further base price rise.
Last Friday, government-run steel mill, Steel Authority of India Limited (SAIL) effected its second base price increase in the current month, hiking it by a modest INR 750/mt ($10/mt), taking its effective base price to around INR 68,250- 68,750/mt ($908-914/mt) ex-works. Early this month, SAIL had increased its HRC base price by INR 1,500/mt ($20/mt).
Trade circles said that, despite modest increase by the government-run steel producer, private mills are looking at more aggressive pricing and an increase by at least INR 1,500/mt ($20/mt) before the end of the current month to offset the nearly threefold rise in prices of coal and energy costs over the past two months.
“We are going to see much more frequent price increases as mills will pass on the fast rising costs of coal to consumers. There is a strong demand revival in the HRC segment of flat products and this will help absorb further price increases,” a Mumbai-based distributor said.
“SAIL’s second price increase has been modest as it is better placed to absorb the rising cost of coal, having its own captive mines. However, we see much more aggressive pricing from private mills, which are more dependent on merchant sourcing of the input,” he said.
$1 = INR 75.20
