Indian steel mills have initiated a 2–5 per cent price hike sequentially across the benchmark hot rolled coils (HRCs), with the average price being around ₹61,000 per tonne for March deliveries.
The HRC prices were in the ₹58,200 per tonne range in mid-February (after a mid-month downward price revision), while the prices announced in early February were around ₹59,000 per tonne.
Effective price hikes, as per trade sources, are anywhere between ₹2,000 and 2,400 per tonne in March vis-à-vis February.
The current hike is due to elevated raw material prices like iron ore and coking coal, improved demand in the domestic market driven by project requirements, and the closure of export offers at a higher price.
“Trade-level HRC and cold-rolled coil prices are likely to stay supported in the near term amid an expected pick-up in market activity. In addition, there are further opportunities in exports. Better-performing global HRC prices are likely to lend support to domestic prices as fresh import bookings will not be a viable option for market participants,” research firm SteelMint said in a report.
Cold rolled coil (CRC) prices have seen a rise of ₹1500–2000 per tonne, with the prices now moving up to ₹67,000–69,000 per tonne.
Raw Material Cost
Between December and mid-February, the price of Australian coking coal firmed up to $396 per tonne (up by $133 per tonne for the period under review). SteelMint’s Odisha iron ore fines (Fe 63 per cent) index, which was around $49 per tonne in December, moved up to $73 per tonne in February.
Mills also expect better domestic consumption, with increased activity on the infrastructure front and higher demand because of ongoing projects, among others. For April to February FY23, consumption of total finished steel in India was 107.195 million tonne, up 11.6 per cent YoY.
This apart, China’s active domestic market has seen prices there improve by $20 per tonne. The price of steel on China’s West Coast is around $704 per tonne at present, as opposed to mid-February, when it was $684 per tonne. This impacted international prices positively and supported India’s domestic markets. SteelMint’s India HRC export index was pegged at $708 per tonne on February 28, up $108 per tonne in early January.