Indian mills raise HRC list prices by up to INR 2,000/t ($24) for January deliveries

Indian tier-1 mills, on 4 January, 2023, raised the list prices of flat products by INR 1,500-2,000/t ($18-24). The revised offers are in the range of INR 55,500-56,500/t exy Mumbai in the case of HRC and INR 62,500-63,000/t exy in the case of CRC. Prices excluding GST @18%.

Reasons for the price hike -

1. HRC import bookings dry out: Prices of HRC on the global trade platform have been on a rise over the last couple of weeks. The landed cost of imported HRC from FTA countries was at a discount of around INR 8,300/t ($100) in November, which has dropped to INR 2,600/t ($31) in December. With the hike in global offers, the imported HRC market in India has slowed down with no newer bookings being reported.

2. HRC export offers receive a boost: With the depletion in stocked-up inventory, end-users, especially from EU are returning to the market post-holidays and Indian mills are being encouraged to make allocations for overseas sales. A further boost lies in the year-end hike in global prices which led to the increase in the Indian HRC export index plus. In Northern Europe, HRC offers have already risen above euro 700/t ($745/t) compared to euro 650-680/t ($692-$724/t) in December. Mills have good order books. Moreover, production cuts during the third and fourth quarters of 2022 and potential growth in end-user demand will lead to further price hikes.

That apart, Chinese HRC (SS400) export offers rose from $580/t FOB Rizhao in early December, 2022 to $610/t FOB as per the last assessment on 3 January 2023. South Korean and Japanese HRC export offers too have increased from $525/t FOB in early December to $600-605/t FOB in early January 2023.

3. HRC trade-level prices surge: Prices in the trade segment have already shown a significant increase. As per the last SteelMint assessment on 04 Jan'23, these prices stand at around INR 57,000/t ($689) exy-Mumbai, up INR 2,500/t ($30) w-o-w. Trade-level prices rose on anticipated improvement in export activities, post-duty removal from 19 November 2022.

5. Hike in raw material prices: Prices of steel-making raw materials like iron ore and coking coal have risen lately. NMDC Chhattisgarh recently hiked iron ore prices by up to a substantial INR 600/t ($7/t). Prices of lump ores were raised by up to INR 500-600/t ($6-7) and fines by INR 500/t ($6), effective from 1 January, 2023.

Coking coal prices have also risen in January to $310/t levels from $279/t in December 2022.

The cost push is also encouraging the price hike from mills.

Outlook
End-user demand is expected to remain strong in Q4. Also, export bookings are likely to regain momentum as players return from holidays.