Indian mills increase coated flat steel list prices by up to INR 2,750/t ($34/t) for early-Feb

• Mills raise list prices by up to INR 2,750/t ($34/t)- for early-February sales
  
  
• Trade reference prices at 8-month high
  
  
• Increase in raw and coating materials prices
  
  

Indian manufacturers of coated flat steel products announced their fourth price hike in January. The latest hike is of about INR 2,000-2,750/t ($24-34/t), with effect from 1 February 2023. Increasing raw and coating materials prices, along with better export opportunities remain the leading factors behind the price hikes. Trade-level prices have also hit an eight-month high, hovering close to levels last seen in early June 2022.

Subsequent to the revision, list prices of early-January sales are as below:

• JSW Steel:
  GP (0.8mm, 80gsm): INR 71,550/t ($872/t)
  PPGI (0.5mm, 90gsm): INR 81,500/t ($993/t)
  
  
• AM/NS India:
  GP (0.8mm, 80gsm): INR 70,000/t ($853/t)
  PPGI (0.5mm, 90gsm): INR 81,000/t ($987/t)
  
  
• Prices mentioned are on an exy-Mumbai basis, excluding GST at 18%.
  
  

Why are mills increasing prices?

1. Raw material prices rise: The prices of raw materials form a major share of the cost of production. On a monthly average basis, special high grade zinc ingot (ingot, Zn 99.99%) prices stood at around INR 293,000/t ($3,571/t) exw-Delhi in January, close to the levels of INR 289,900/t ($3,533/t) exw-Delhi seen in September 2022. This stood at around INR 284,400/t ($3,466/t) exw-Delhi in December 2022 and INR 271,400/t ($3,308/t) exw-Delhi in November 2022, as per SteelMint records.

Meanwhile, trade-level prices of cold rolled coils (CRCs), a major substrate material required for manufacturing value-added coated steels, are also on a continual ascent. The monthly average of trade prices of CRCs (IS513 Gr O, 0.9mm) stood at INR 62,900/t ($767/t) exy-Mumbai in January, higher by INR 3,400/t ($41/t) against early January 2023.

2. Trade level prices at an eight-month high: Trade reference prices have hit an eight-month high mark, hovering close to the levels, last seen in early-June 2023. SteelMint's weekly assessment of galvanised plain (GP) coils (0.8mm, 120gsm) stood at INR 75,000-76,000/t ($914-926/t), while pre-painted galvanised iron (PPGI) (0.5mm, 90gsm) prices were at INR 83,000-84,000/t ($1,012-1,024/t) on 3 February. Prices are on an exy-Mumbai basis, excluding GST at 18%. (INR 1 = USD 0.0121878 ; USD 1 = INR 82.0494)

Domestic market participants have being informing about the shortage of materials in the market lately. "Supplies of coated steel products into the distribution channel has slowed down in January," infromed a major distributor from the west. Mills' focus on exports and improved supplies to OEMs and infrastructure businesses has led to the shortage, he added.

European buyers had booked 125,000-130,000 t of coated flat steel products for January and February deliveries, as reported a couple of weeks back.

Meanwhile, Indian mills have not issued an offer for coated products in the overseas market, and stand withdrawn for the past couple of weeks, SteelMint learnt from sources.

3. End-user industries show improved performance: End-user industries for coated steel have also started expediting their activities with the fiscal year nearing its end. Construction and infrastructure, and power generation and distribution segments have already started to show improved performance. Capacity additions in the green energy segment continue which has led to increase in procurement from this segment, hinted a source. Among them, the wind power segment saw an addition of 1.337 MW m-o-m to 63,303 MW in December 2022, as per the data released by Central Electricity Authority. Similarly the solar power capacity was recorded at 49,374 MW and wind power at 41,930 MW in December.