India’s steel mills are looking at an interim price hike of ₹1,500 - ₹3,000 per tonne (/t) across select offerings which include benchmark hot rolled coils (HRCs), TMT bars and some other categories like HR strips.
Prices are hovering at around ₹57,000/t for HRCs - the highest in three months since October- and hikes come on the back of better performance by end-user industries and a rise in coking coal costs apart from improved domestic demand.
This will be the second time this fiscal that mills see an interim price rise, after the April - May period when high coal cost and strong export bookings initiated the move.
Also read: Steel mills hike prices on improving global sentiments, higher raw material costs
Mills raised their prices in January, after a prolonged eight-month lull because of poor export demand, sluggish domestic orders, rise in imports and imposition of export duty.
Larger steel players raised list prices of flat products by ₹1,500 - 2,000/t in the first week of January. The revised prices were in the ₹55,500-56,500 range for HRCs and in ₹ 62,500-63,000 for cold rolled coils (CRCs). Reportedly, the increase was absorbed.
SteelMint, a market research firm, in its weekly assessment report, said HRCs stood range-bound whereas CRCs rose by ₹600/t ($7/t) as on January 11.
“Mid-month hikes are likely as end-user industries like auto reported a good set of sales numbers. Raw material prices - iron ore and Australian coking coal - are up too,” a steel mill owner told businessline. The mill has already hiked rebar, TMT and HR strip prices.
End-user industries perform better
Infrastructure and construction businesses are coming up with requirements lately, while demand from automobile, home appliances and manufacturing sectors have also improved.
For instance, Maruti Suzuki rolled out 1,916,875 units in 2022, up 250,530 units from the preceding year. In December 2022, it produced 124,722 units as per the company’s update on BSE.
Also read: ‘Rising steel imports from Korea, China more worrying than Russia’
Tata Motors recently reported production of 221,416 units in the fourth quarter (October-December), 2022, up by 23,683 units over last year. In calendar year 2022, production was up by 256,304 units.
Improved demand for automobiles and the easing of chip shortages boosted production. This resulted in better demand for HRCs and other value-added products.
“Trade-level prices may continue to rise in the coming weeks as traders are refraining from reducing their quotes. Furthermore, the end-consumer industries will be expediting their activities with the fiscal year inching closer to its end which is going to lend additional support to prices,” SteelMint’s report said.
SteelMint’s weekly Odisha iron ore fines Fe 63 per cent index rose by about ₹1,400/t to ₹15,100/t as on January 7, up from the ₹4,750/t levels of December and ₹ 3,700/t in November.
Similarly, Australian-origin premium HCC coking coal prices stood at $315/t, a weekly average basis for early January. These stood at around $263/t for early December and at $302/r for December-end.
Export prices up
Export price of HRCs are also up by $30-$50/t across markets like Europe and Vietnam.
Also read: India’s steel exports up 30 per cent sequentially in December
Mills increased HRC export offers to the European market by about $50/t to $720-725/t following improved restocking activities.