Indian integrated steel mills have completed base price hikes for flat products for November, pushing up local hot rolled coil (HRC) prices, while tradable prices have also moved up proportionally amid reports of a further tightening of supplies during the November-December period, triggering an all-round rush to conclude fresh bookings by both end-users and market intermediaries, SteelOrbis learned on Monday, November 9.
Sources said that, despite current HRC prices being at a two-year peak, this has not been a deterrent to the spike in fresh bookings in response to sustained high demand among end-user industries and apprehensions of a further tightening of supplies amid steady reports that several end-users have not been getting confirmations of their large-volume bookings and are instead settling for lower-volume deals from producers.
It was also learned that some integrated steel mills are continuing to seek premiums ranging 1-2 percent for early December shipments for relatively smaller-volume bookings.
According to market sources, producers have increased base prices by INR 1,000/mt ($13/mt) to the range of 45,000-45,500/mt ($606-613/mt) ex-works. Tradable prices in the western region markets have also increased in reaction, to around INR 44,500/mt ($600/mt) ex-stockyard, while some producers have said that the selling prices are at INR 44,000/mt ($593/mt) ex-stock or slightly below.
There were intense speculations in the market that availability of flat products will continue to get squeezed over the next two months in view of Tata Steel planning a routine maintenance shutdown of its cold rolling mills. But the company has officially declined to provide any confirmation of this, while maintaining that ‘all supplies would be maintained in the market as of now”.
Sources said that, despite tight local supplies of HRC, imports are still not a preferred option, particularly among relatively smaller and medium-scale end-users, largely owing to procedural hurdles and risks of delays in arrivals of imports in view of mandatory registration under Steel Import Monitoring Systems (SIMS). Industry reports indicated that flat steel imports in September this year were around 0.3 million mt, down from 0.48 million mt during the corresponding month of the previous year, and low inward shipments and rising costs of domestic iron ore prices provide a window for producers to sustain a further base price increase in December, an official at JSW Steel Limited said.
$1 = INR 74.20
