At the start of 2011, the Indian domestic flat steel market has continued to witness the upward trend seen in previous weeks. Major Indian steelmakers, including Steel Authority of India Limited (SAIL), JSW Steel, Essar Steel and Tata Steel, have all increased their flat steel prices for January.
Accordingly, SAIL has increased its domestic flat steel prices by INR 750-1,000/mt ($17-22/mt) on average, depending on the product, while JSW Steel has moved up its prices by INR 1,000-1,500/mt ($22-33/mt). Essar Steel and Tata Steel have raised their flat steel prices by INR 1,000-1,500/mt ($22-33/mt). Following these price hikes, Indian steelmakers' average hot rolled coil (HRC) price level has reached INR 32,700-33,200/mt ($723-734/mt). Meanwhile, activity in the local Indian flat steel market has this week shown some slight revival as compared to previous weeks.
On the other hand, import flat steel offers to India vary. SteelOrbis has been informed that the Russian mill Severstal's flat steel offers to the Indian market are currently standing at base price levels of $710/mt CFR for hot rolled coil (HRC), $830/mt CFR for cold rolled coil (CRC) and $940/mt CFR for hot dip galvanized (HDG) coil - all for February production.
SteelOrbis has further learned that Taiwanese traders' hot rolled coil (HRC) offers to India for material of 2 mm thickness stand at $650/mt FOB, while Chinese HRC offers to India stand at $660/mt FOB. Indian buyers indicate that Russian producers' HRC offers of $710/mt CFR are at workable levels for them. While conclusions of import transactions have not been heard so far, buyers are expected to start their bookings soon, causing increased activity in terms of India's flat steel imports.
Ex-India hot rolled coil (HRC) offers via traders are currently standing at $680/mt FOB, while ex-India cold rolled coil (CRC) offers via traders are at $780/mt FOB, both for February shipments. However, buyers are not showing interest in these offers. Particularly, HRC offers remain higher than buyers' price ideas. Meanwhile, SteelOrbis has been informed that pre-painted galvanized iron (PPGI) offers given from India stand at $980/mt FOB, while galvanized steel offers are at $880/mt FOB, both for February shipments. According to traders, lower price levels can be obtained upon negotiation.
Generally speaking, flat steel prices in the local Indian market and also in import and export offers have continued to move up since early December last year, primarily resulting from the general rising trend seen in the international markets, as well as due to increased production costs arising from scrap and iron ore price hikes. Prices in iron ore contracts for the first quarter of 2011 have increased by 8-10 percent quarter on quarter. In line with these factors, the price increases of Indian steel producers in early January also provide an indication of the likely future trend of the market.
On the other hand, the biggest flat steel consumer in India is the automotive industry. The rapid growth of the Indian automotive industry is foreseen to continue also in the coming 12 months, increasing anticipations regarding a revival of domestic demand. The Indian white goods and construction industries are also expected to register growth this year.
Market players' general expectations are for further price increases in the Indian flat steel market in the coming days.