The Indian flat steel market has witnessed more price hikes this week. With demand not showing any improvement yet, the price increases have resulted from the influence of trends observed in the world steel markets.
This week, Indian steelmakers have raised their domestic flat steel offers by INR 500-1,000/mt ($11-22/mt). Thus, local hot rolled coil (HRC) offers from the country's major steel producers SAIL and JSW Steel have reached the level of INR 32,000-32,500/mt ($709-720/mt). Meanwhile, spot market offers are INR 500-1,000/mt ($11-22/mt) above these levels. However, buyers do not appear to be showing interest in these offers.
As regards India's flat steel imports, Chinese offers have continued to show increases on a daily basis. SteelOrbis has learned that Chinese HRC offers to India have risen by $10/mt week on week to the price range of $680-690/mt CFR. Last week, foreseeing that prices would continue to rise, some Indian buyers concluded transactions at last week's price level of $67-680/mt CFR. One large booking is reported to have been concluded at $600/mt CFR. Indian buyers think that the current workable price level for HRC is $670/mt CFR. Holding the view that the high offer levels from China are speculative, Indian market players think that $20-30/mt discounts on Chinese offers are possible, depending on order volumes. Increasing prices have caused Indian buyers to remain under pressure, while transaction volumes are still on the low side. In this context, a wide range of offers levels is heard in the import market which is currently characterized by uncertainty.
Previously, due to sluggish domestic demand Indian steelmakers were focused on the export markets, concluding various transactions to different markets, including Europe, the Middle East and Africa. SteelOrbis has learned that Indian steel producers have recently withdrawn their offers for hot dip galvanized (HDG) coil and pre-painted galvanized iron (PPGI) products. Although the steelmakers claim that this withdrawal is due to the fact that they have already filled their order books, the common impression in the market suggests that the real cause was that their offers were on the high side.
On the whole, the rising trend in the Indian flat steel market has been supported by higher production costs and the general uptrend observed in the international markets. Meanwhile, demand is expected to strengthen with the beginning of the New Year. Recently, many buyers have been seeking material due to the approach of the end of the year, as well as expectations of further price hikes. The still ambiguous market may witness increased activity in the coming period.
$1 = INR 45.128