India: SAIL raises HRC list prices for February 2024; but closes January with rebate

Indian state-owned steel manufacturer Steel Authority of India Limited (SAIL) disclosed a rise of approximately INR 500/t in list prices for Hot-rolled coils (HRC) and cold-rolled coils (CRC) in February 2024. Concurrently, the mill provided rebates of INR 2,000/t for January 2024, as per industry sources. Effective list prices, factoring in the rebate, are now estimated at roughly INR 55,000-55,500/t for HRC and INR 60,500-61,000/t for CRC. The price adjustment reflects quarterly increases in raw material costs and subdued trade market activities in January. In January 2024, the mill had announced list prices in the range of INR 56,500-57,000/t.

Factors that impacted the price announcement:

Increase in raw material prices q-o-q: The rise in raw material prices on a quarterly basis has increased the cost burden, serving as a primary reason for the February sales price hike. For instance, BigMint Odisha Iron Ore (Fines 0-10mm, Fe 62%) increased by approximately INR 440/t q-o-q to INR 5,040/t ex-Mines in Q4 CY2023, compared to INR 4,600/t ex-Mines in the previous quarter.

Likewise, the average offers for imported premium hard coking coal (HCC, Australian Origin) increased by $73/t q-o-q in Q4 CY2023, reaching $350/t CNF Paradip, India, compared to $277/t CNF in the previous quarter. This escalation in cost burdens was also noted by some private mills during their investor calls held in the previous week.

Slow trade market activities flagged the Rebates: Trade market sentiments and price directions were less optimistic in January, influenced by the procurement patterns of end-industrial buyers based on their needs. The monthly average trade market price movement showed a moderate decline. For example, the average HRC prices decreased to INR 54,300/t (down INR 800/t) in January 2024 from INR 55,100/t exy-Mumbai in December 2023. Similarly, CRC prices saw a slight decrease of INR 400/t m-o-m, reaching INR 62,000/t exy-Mumbai in January 2024. The prices mentioned are for cut-to-length (CTL) sheets, excluding GST at 18%.

Outlook

Private steel majors are also considering announcing a price increase of INR 1,000-1,500/t for February 2024 and may make an official announcement in the coming days. However, BigMint could not confirm whether they are providing any form of price support or rebate for January 2024.