Indian integrated steel mills have hiked their local hot rolled coil (HRC) base prices for the third time in the current month with immediate effect, traders and market sources said on Tuesday, December 29.
The price increase announced by several producers on Monday was in the range of INR 1,500-2,000/mt ($20-27/mt), traders and sources at producing companies said. Following the base price hikes, the effective HRC price moved up to around INR 51,000-52,000/mt ($694-707/mt) ex-works.
Market sources said that producers still enjoy significant headroom for increasing prices having assessed that current demand and short supplies in the market will continue through the first quarter of the next fiscal year.
The industry has estimated that total inventory at integrated steel mills was not more than 10 million metric tons in November, which would provide supply-side support to local prices.
However, a number of market participants have pointed out that the government will not interfere with the free pricing regime in steel sector but could consider supply-side measures like a reduction in import duty to increase price competition with local producers.
It has been pointed out that the differential between the landed cost of imported ex-China HRC and local prices is not more than 5-10 percent and, with international steel prices continuing to remain strong, any lowering of import duty would have a minimal impact in absolute pricing terms.
$1 = INR 73.50
