Indian domestic steel mills have started effecting hikes in hot rolled coil (HRC) base prices for November, SteelOrbis learned from industry circles on Tuesday, November 2.
Sources in the industry said that JSW Limited, Jindal Steel and Power Limited (JSPL) and ArcelorMittal Nippon Steel Limited (AMNS) took the lead today in increasing base prices by a range of INR 3,000-3,500/mt ($40-47/mt) for current month deliveries.
The three producers announced HRC increase rates, but no official effective revised base price lists are available, prompting market participants to speculate that the hikes will be effected through an ‘energy surcharge’ for determining pricing under long-term supply contracts.
Trading circles said that traded HRC prices have remained stable at INR 72,100- 73,100/mt ($963-976/mt) ex-Mumbai and they will wait for a further clarification on the component of the increase before reacting with upward adjustments.
It might be noted that last month JSW Limited had announced that it was working on a pricing mechanism incorporating a variable surcharge on the HRC price linked to the energy costs of mills, as is the practice in parts of Europe.
“Cost inflation is too great and the price rise is along expected lines. Energy costs have gone up 70 percent since early this year, while the domestic iron ore price fall has been nominal,” a source at AMNS said.
Another industry source said that the latest round of price increases takes care of just 50 percent of the increase in costs and that the prices will need to move up another $100/mt to fully compensate for costs at current levels.
$1 = INR 74.90
