At least three large Indian integrated mills have taken the lead in hiking flat steel product prices for the second time over the past two weeks, to protect margins from rising costs of energy and imported raw materials, SteelOrbis learned from company sources on Tuesday, March 17.
According to the sources, other large and medium-scale mills are expected to follow suit over the next few days.
The sources said that base prices have been increased by an average of INR 1,500-2000/mt ($16-22/mt) with immediate effect.
Following the revision, the listed price of hot rolled coil (HRC) now stands at INR 55,350-57,500/mt ($599-623/mt) ex-works. Market sources point out that in the current conditions mills will insist on prices at INR 57,000/mt or above.
Effective listed prices for cold rolled coil (CRC) now stand at INR 62,000-64,850/mt ($671-702/mt) ex-works.
“Domestic steel mills are under pressure to protect margins from cost rises. There are not only supply disruptions of energy supplies like industrial gases for sectors not included under priority sectors as declared by the government, but prices are also rising. Landed costs of imported raw materials are increasing on the impact of the Middle East war on freight rates,” said an official at a large mill, which has not yet effected a price increase.
“The landed price of coking coal has increased about 11-15 percent since the outbreak of the war. Medium-scale mills do not have much of a cushion to absorb these increases,” he added.
A Mumbai-based trader stated, “The second rapid base price increase was expected and largely factored in by the market. We do not see many trade-level prices reacting negatively. Moderate prevailing demand will enable the market to absorb the hike. Flat product prices are already at a 28-month peak. If cost inflationary pressures persist, a demand depression is a distinct risk if uncertainties from the war in the Middle East are prolonged.”