Indian integrated steel mills led by ArcelorMittal Nippon Steel Limited (AMNS) and JSW Steel Limited have started hiking flat product base prices for June after two rounds of price increases in May. This time, HRC prices have added INR 3,000-4,000/mt ($41-55/mt) with effect for deliveries from June 1, SteelOrbis learned from trade circles.
Following the latest base price revisions, effective prices for hot rolled coil (HRC) have moved up to INR 69,000-71,000/mt ($944-971/mt) ex-works, according to market sources. The new effective price for cold rolled coil from several mills works out to around INR 83,000-86,000/mt ($1,135-1,176/mt) ex-works. The range of CRC prices is up by INR 3,000/mt ($41/mt) on average, according to SteelOrbis data.
Trade circles said that, even though government-run steel mills are yet to announce higher base prices, such a decision is expected any time over the next few days after their respective pricing committees complete their meetings.
Although private steel mills have not formally announced higher base prices, several officials at integrated steel mills have clearly indicated that market conditions favour a rise in base prices for flat products, considering that the landed price of imported flat products is still at a 10-12 percent premium over local prices.
“The gap between imported and local prices is advantageous for steel users,” Ranjan Dhar, chief marketing officer of AMNS, said. He stated that Chinese futures are up $50-60/mt over two trading sessions, increasing the differential between the landed price of imports and domestic prices, making a case for the increase of the latter.
According to rating agency, India Ratings (Ind-Ra), a rapid increase in prices of iron ore due to supply shortage and a shortage in supply of finished steel due to production cuts in China and the withdrawal of the export rebate are driving up steel prices.
However, Ind-Ra maintained that the current prices are not sustainable in the long run and that the pace of the price increase may slow down and volatility may be seen in the medium term.
Indian consumption of finished steel in April this year registered an increase of 516 percent year on year owing to the low base effect from the complete national lockdown in April 2020. However, consumption in April this year was down 25.7 percent on month-on-month basis.
Trade circles pointed out that integrated steel mills have refrained from any immediate increase in long product prices in view of construction and infrastructure activities taking a big hit from ongoing lockdown restrictions and the shortage of manpower.
$1 = INR 73.10