Indian steel mills have hiked local hot rolled coil (HRC) base prices for the second time during the current month, by INR 2,000-2,200/mt ($27-30/mt), SteelOrbis has learned from traders and producers in the market.
With the second round of price increases, the effective rate for the current month has moved up to levels of INR 49,500-50,000/mt ($673-679/mt) ex-works. According to trade circles, the effective tradable price in the western regional market around Mumbai is reported at levels of INR 51,000-51,500/mt ($693-700/mt) ex-Mumbai.
The higher base price will be effective for all bookings concluded after December 9, officials at steel mills said.
At least two market participants have said that local steel mills are expected to go in for a price increase every month for the rest of the current fiscal year.
According to a steel sector analyst with a Mumbai-based financial services advisory firm, the second base price hike was well anticipated by the market, in view of strong demand, aggressive re-stocking by dealers, and large-volume bookings by end-users backed by almost zero imports, providing local producers sufficient headroom to increase prices and maximize margin realizations.
However, the second price increase of the month is expected to fuel fresh opposition among small and medium-scale end-users and within the government, with the minister of highways, Nitin Gadkari, already having charged steel and cement producers with forming cartels to increase prices without reason’ leading to an escalation in costs for government projects.
The minister has also sought intervention of Indian prime minister Narendra Modi to rein in cement and steel producers from taking advantage of government policies to boost industrial activities after the pandemic to make unreasonable profits.
