India : Domestic HRC gains as mills lift July prices

Domestic HRC prices were higher by INR 250-500/t in most markets this week as major steel mills announced list price increases for July deliveries. Prices in a few markets were, however, flat from previous week's levels.

Steelmint's assessments of HRC, CRC, plate prices
*HRC (IS 2062, 2.5 - 8mm) prices were at INR35,500-36,500/t (ex- Mumbai), INR 36,000-36,500/t (ex-Delhi), and INR 37,500-38,000/t (ex-Chennai).

*CRC (0.9 mm IS513 GR) prices were assessed at INR 40,000-42,000/t (ex- Mumbai), INR 41,500-42,500/t (ex- Chennai) and INR 40,200- 42,000/t (ex-Delhi).

*HR plate prices (IS 2062 5-10mm) are hovering in range of INR 35,500-36,000/t (ex-Mumbai) and INR 35,500-36,500/t (ex-Delhi).

The prices mentioned above do not include GST at 18% rate.

Price outlook remains bearish
Traders do not expect the price gains made this week to persist as end-customers might be unwilling to buy much volume at these prices.

Mills might have to offer discounts to customers by around INR 1,000-1,500/t as end-user sectors such as manufacturing and construction reported slow sales in the domestic market.

Many traders have not signed their MoU yet with mills for July steel deliveries and are still negotiating purchase prices.

Persistence of coronavirus-related restrictions in several cities, including the five metros, continues to dampen economic activity and steel demand.

In the auto sector, for instance, orders for commercial vehicles are higher in July-Aug but bookings are dull for passenger cars.

Indian steel producers may also have to reduce domestic prices as export volumes are likely to fall in the near-term, as China may need fewer import tonnes with most mills ramping up output while Vietnam's steel demand is slower in the current rainy season.