Indian integrated steel mills led by JSW Steel Limited and ArcelorMittal Nippon Steel Limited (AMNS) have gone in for drastic cuts in flat product base prices for June shipments and more mills are expected to follow in reaction to imminent oversupply in the domestic market from imposition of the export tax, SteelOrbis learned from company sources on Thursday, June 2.
The new list price for JSW Steel Limited’s 2.5-8 mm hot rolled coil for the current month stands at INR 65,350/mt ($842/mt) ex-works and for 0.9 mm benchmark cold rolled coil (CRC) stands at INR 72,850/mt ($939/mt) ex-works.
List prices of AMNS for the current month are reported at INR 65,000/mt ($838/mt) ex-works for HRC and INR 73,000/mt ($941/mt) ex-works for CRC.
In early May, Indian mills had cut flat product base prices to a range of INR 74,000-76,000/mt ($954-979/mt) ex-works for HRC and INR 82,000-83,000/mt ($1056-1069/mt) ex-works for CRC. This means that base prices have dropped by around INR 10,000/mt ($129/mt) on average since last month.
Current base prices for HRC and CRC from ANMS and JSW Steel are below the tradable prices reported early this week, and so they will also fall in the near future.
“Other mills will have to follow similar cuts in base prices. There have been almost no exports over the past week. Stray small-volume deals by some are at negative margins and cannot be sustained. This impact will build up gradually and domestic inventories will rise and there is no option but to reduce base prices if more domestic sales have to be achieved by producers,” an official at one of the mills said.
“Indian mills will continue to sell overseas. But these sales will either be at much lower volumes and at marginal or even negative margins. Either way, there will be a need to sell more at home and prices will continue to remain under pressure as long as the export tax remains in force,” he said.
