Will Indian Steel Mills Roll Over Flat Steel Prices in July ?

SteelMint in conversation with major Indian steel mills learned that there are indications going on in the market that mills might plan to keep HRC, CRC prices unchanged for July. However sources mentioned that official announcement is expected to be out in a day or two.But the trade segment is still struggling with dull domestic demand and expects some discounts/rebates to be announced later in the month.

Factors that Indian mills may consider for flat steel price revision are:

1. Increased export bookings- SteelMint last week reported that major Indian steel mills booked around 80,000 MT of HRC with Vietnam at around USD 508-510/MT CFR basis for July shipments. Thus Indian steel mills are actively exploring export options amid sluggish buying and lackluster demand prevailing in domestic market.

2. Ongoing Safeguard duty discussions - As per reports, the Indian steel industry is seeking a safeguard duty of 25% on ad valorem on a wide range of steel products in order to compete with increase in imports. However clarity/announcement is awaited. Thus this will reduce cheaper imports from major exporting nations and protect the interest of steelmakers in domestic market. Also market participants are eyeing for national budget which will be presented on 05th Jul'19.

3. Arrival of Monsoon season:-Approaching monsoon season will lead to slowdown in construction and infrastructure activities. This may keep domestic HRC prices under pressure over weak demand. Trade prices fall to 4-month low amid sluggish demand in domestic market.Trade sources shared that domestic HRC market is struggling with weak domestic demand, lower sales volumes and gloomy sentiments prevailing in domestic market. Weak demand from auto and construction sector have weighed down domestic steel prices.

As per SteelMint assessment domestic HRC prices have hit 4 months low. Similar levels were recorded in the month of Feb'19.

Last week SteelMint's assessment for HRC (2.5-8mm, IS2062) trade reference prices was around INR 40,000/MT (ex-Mumbai), INR 40,000-40,500/MT (ex-Delhi). Prices mentioned above are basic and extra GST@ 18% will be applicable.

And for CRC (0.9mm, IS 513) trade reference prices is around INR 45,000/MT(ex-Mumbai),INR 43,250-45,000/MT (ex-Delhi) and INR Prices mentioned above are basic and extra GST@ 18% will be applicable.