Indian mills raise HRC list prices by up to INR 3,750/t ($24) for February deliveries

Indian tier-1 mills, on 1 February, 2023, raised list prices of flat products by INR 3,500-3,750/t ($18-24/t) over and above those announced for early January sales. The revised offers are at around INR 59,500/t exy Mumbai in the case of hot rolled coils (HRCs) (IS2062, 2.5-8mm), and INR 66,500-67,000/t exy in the case of cold rolled coils (CRCs) (IS513 Gr O, 0.9mm). Prices exclude GST @18%.

Reasons for the price hike

1. HRC export offers at six-month high: Indian mills have been actively scouting for export opportunities since the withdrawal of the 15% export duty on 19 November, 2022. SteelMint's India HRC export index was assessed at $690/t FOB east coast as on 31 January 2023, touching a six-month high mark. Furthermore, the same has jumped about $90/t against $600/t FOB assessed on 3 January 2023.

That apart, Chinese HRC (SS400) export offers have also risen to six-months high at $655/t FOB Rizhao as per the last assessment on 31 January. The same is now up by $45/t against $610/t FOB at the beginning of January as per SteelMint records. The market had, however, remained inactive for a week amid the Lunar New Year holidays observed toward end-Januray.

HRC exports bookings from India have also raced up by 61.5% in January 2023. The bulk HRC export shipments rose to 396,230 tonnes (t) in January 2023 contrasted against 245,316 t in December 2022, as per data maintained with SteelMint. A lion's share of exports was directed towards Europe 213,580 t (54%) followed by Vietnam at 60,000 t (15%) and the UAE, 47,000 t (12%). Furthermore, Indian mills have shifted focus towards the European Union where the export realisations are higher. Indian HRC (S235) export offers to Europe have steeply increased by about $120-125/t to $795-800/t CFR Antwerp as on 31 January as against $675/t CFR in early January.

2. HRC trade-level prices surge: Prices in the trade segment have continued to rise. SteelMint's benchmark assessment for HRCs (IS2062, 2.5-8mm) increased by about INR 2,800/t ($34/t) to INR 59,700/t ($708/t) exy-Mumbai in end-January in comparison to the levels seen in early January. Moreover, mills had announced interim hikes during the month amid the continual increase in trade-level prices.

"Increased focus on exports post-the duty removal has led to a supply disruption in the domestic trade market," emphasised a major distributor. This, in turn, is pushing distribution channel participants to quote higher in the market, he added.

As per the latest assessment on 1 February 2023, trade segment HRC prices further increased to INR 60,500-61,500/t ($740-752/t) exy-Mumbai, up INR 1,200/t ($15/t) w-o-w. Simiarly, CRC (IS513 Gr O, 0.9mm) prices edged up by INR 700/t ($9/t) w-o-w to INR 65,000-66,000/t ($795-807/t) exy-Mumbai. Prices mentioned above, exclude GST @ 18%. (1 INR = USD 0.0122293 ; 1 USD = 81.7709)

3. 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 INR 500/t ($6/t). Prices of lump ores were raised by up to INR 300/t ($4) and fines by INR 500/t ($6), effective from 28 January, 2023.

Moreover, the Odisha iron ore fines (0-10mm, Fe 63%) assessed at INR 5,750/t ($70/t) on 28 January, has hit about an eight month high. Meanwhile, weekly average prices of imported hard coking coal (premium HCC, Australian origin) stood at $340/t CNF India for week# 4 (23-28 January), hitting a two-month high, as per SteelMint records.

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