Local Indian hot rolled coil (HRC) prices have increased across most regional markets over the past week with more integrated steel mills joining in to hike base prices, sources said on Monday, October 5.
Traders and officials among steel producers have said that the official HRC price from mills in the local market now averages in the range of INR 44,000-44,500/mt ($601-608/mt) ex-works, up from levels of INR 42,500-43,000/mt ($581-588/mt) ex-works in the earlier week, as almost all producers announced higher base prices for current-month deliveries, riding on strong fresh bookings by end-users and restocking by market intermediaries.
It was pointed out by producers that current prices are close to nine percent higher than pre-Covid levels in March at the time when the national lockdown was announced.
The transaction prices by major private mills have increased to INR 43,000-43,250/mt ex-stock, up by INR 1,000-2,000/mt ($14-27/mt) compared to the previous trade prices for September deliveries.
“Improvements on the supply side with most producers now operating mills at above 90-95 percent levels are being supported by the steady revival in demand among key end-user industries, offering headroom for producers to increase prices… Recovery from the pandemic is faster than expected,” an official at Steel Authority of India Limited (SAIL) told SteelOrbis.
At least two traders said that there has been a significant rise in restocking by market intermediaries as most expected producers to continue to increase base prices through the next quarter.
It has been learned that a number of integrated steel mills are lowering export volumes to divert higher tonnages for sales in the local markets in view of tightening supplies and higher margin realizations in local sales.
“Exports are returning to usual pre-Covid levels as domestic demand is rising close to pre-lockdown levels,” an official at JSW Steel Limited said.
Jindal Steel and Power Limited in a statement said that, with rising demand expected to gain momentum through the festival months of October-November, it would be selling more than 80 percent of its finished steel in the local market.
$1 = INR 73.14