India: Domestic HRC price gains amid tight supply

Traded prices of domestic HRC cargoes reported an increase of INR 500-1,000/t ($7- 13) this week, as Indian mills increased prices yesterday. Tight stocks with mills also supported prices.

SteelMint's assessments of HRC and CRC prices-

• HRC (IS 2062, 2.5 - 8mm) prices were at INR 37,500-38,250/t (ex- Mumbai), INR 37,000-38,000/t (ex-Delhi) and INR 38,500-39,000/t (ex-Chennai).
  
  
• CRC (0.9 mm IS513 GR) prices were assessed at INR 42,500-43,500/t (ex- Mumbai), INR 43,500-44,500/t (ex- Chennai) and INR 42,500- 44,000/t (ex-Delhi).
  
  
• The prices mentioned above do not include 18% GST.
  
  Factors driving domestic HRC prices:
  1.Indian steel mills raise list prices- Major steel mills - JSW Steel, Tata Steel, JSPL and SAIL - have raised HRC & CRC prices yesterday by around INR 1,000-1,250/t for Aug'20 deliveries. This is in addition to an increase of INR 500-750/t earlier in July. 

  2. Tight supply- Limited production and increased exports of thinner gauge HRC tightened supplies in the domestic market.

  3. Improved buying- Traders liquidated stocks in Apr-Jun and avoided large-volume bookings due to frequently-announced lockdowns. However, with the announcement of unlocking in various states, traders are actively making fresh bookings since they have limited stocks in hand.
  
  4. Indian HRC export offers further up by $10/t - Steel mills have raised their HRC export offers by $10/t this week at around $485/t CFR basis in line with higher global prices.

  Outlook- Indian steel mills may further raise list prices of HRC and CRC prices on the 1st of Aug'20 amid robust demand and optimistic market sentiments. However, whether further increase in prices could be sustained in the market remains uncertain