India: Mills announce further HRC, CRC price hikes; trade segment follows

A few steel majors announced subsequent prices hikes in hot-rolled coils (HRCs) and cold rolled coils (CRCs) in addition to the ones taken in the first week of March. Hence, trade level prices shot up by INR 5,000-6,000/t ($65-79/t) for HRCs while CRCs saw further hikes by INR 7,000-8,000/t ($92-105/t) in key markets, this week.

AM/NS India annouced the second round of hikes of INR 4,500/t ($59/t) across its flat steel product category, including galvanised steel coils. The effective list price now stands at INR 72,500-73,500/t ($948-961/t) for HRCs, and INR 78,500-79,000/t ($1,027-1,033/t) for CRCs, and INR 82,000-82,500/t ($1,073-1,079/t) for GPC (0.8mm, 80gsm). Prices mentioned are on an exy-Mumbai basis, exclusive of GST @ 18%.

Moreover, public sector steel mill- Steel Authority of India (SAIL) took a total hike of INR 6,000/t ($79/t) since the beginning of March. Subsequent to the revision, SAIL's list prices of HRCs now stand at INR 71,000-72,000/t ($929-942/t), while those of CRCs are at INR 77,000-78,000/t ($1,007-1,020/t). Prices mentioned are on an exy-Mumbai basis, exclusive of GST @ 18%.

JSW and Tata Steel Limited are yet to announce further price increases.

What factors are driving up prices in the Indian trade market?

Escalating prices in global markets: The prices of HRCs and CRCs are on a rise on a global scale. Chinese HRC export offers too have risen to $915/t FOB, steeply up by $200/t contrasted against $793/t FOB at the beginning of Feb'21. Also, these prices are up by $80/t w-o-w. Furthermore, with the hiked offers fetching higher realisations, the Indian steel majors are actively offering HRCs for exports in the European market lately. Current offers to Europe have shot up to $1,250/t CFR Europe from the levels of $1,140-1,150/t CFR heard at the beginning of the week.

Spurt in raw material prices: The Australian origin premium hard coking coal prices hit a new high at $692/t CNF Paradip India as assessed on 9 Mar'22, up by a significant $209/t contrasted against $483/t CNF at the beginning of the month. However, the prices inched down to $683/t CNF as per the assessment on 10 Mar'22. Meanwhile, the weekly assessed SteelMint's Iron Ore Fines (0-10mm, Fe 63%) Odisha Index has also been on a continual rise since mid-Jan'22 and has shot up by INR 1,750/t ($23/t) to INR 6,850/t ($90/t) as assessed on 5 Mar'22.

Manufacturing PMI rises to 54.9 in February: The Purchasing Managers Index (PMI), a measure of the prevailing direction of economic trends in manufacturing increased in Feb'22. The PMI rose to 54.9 for the month, from 54 in January, with an expansion in output and new orders in February as per IHS Markit . Also, it marked an expansion for the eighth month in a row, with the PMI staying above the long-run average of 53.6. Favourable demand conditions led to a sharp uptick in business optimism since last October.

Near-term outlook
Steelmills are likely to maintain the current momentum in their prices in the near-to-medium term, primarily driven by the elevated prices of raw materials.