Indian mills to hike coated steel list price up to INR 2,000/t ($27) for Nov

Indian steel mills are planning to increase color coated prices by INR 1,000-2,000/t in Nov, SteelMint learned from market sources. A steep hike in hot rolled since past few months can be attributed for hike in coated steel prices. However, market participants from trade segment shared that further hike in prices seems difficult to be absorbed on subdued demand.

After an increase, color coated (PPGL) prices will be around at INR 76,600/t (exy-Mumbai). Last month the price was around INR 74,600/t (exy- Mumbai). Prices do not include GST @18%.

Reasons driving steep hike in color coated prices:
1.Spurt in roofing demand - Color-coated sheet is highly preferred for roofing. Roofers are mostly back to pre-Covid capacity. A combination of pent-up demand in the summer, combined with government stimulation packages, and people working from home wanting home-upgrade resulted to improved buying of color coated coils/sheets

2.Steep hike in hot-rolled coil prices- Major steel mills are continuously raising HRC prices on higher input costs and short supply. On an average basis, HRC (2.5-8mm, IS2062 ) stood at INR 43,000-43,500/t (exy-Mumbai) which was around INR 38,750/t at the beginning of Aug'20.In the last three months, HRC prices went up by almost INR 4500/t.

3.Demand recovery from white goods sector -There was continued demand for white goods during the second quarter, in great contrast to the slump in demand during the April-June quarter, which was caused by the prolonged lockdown. The sale of washing machines and refrigerators saw better demand from Aug and Sept months

However, on the other hand, traders are of opinion that a price hike is not workable due to slow demand in the market. Currently, PPGI prices (0.5mm 90GSM ) is hovering around INR 63,000-63,500/t (exy-Mumbai). Prices do not include GST @18%.

Market share of color coated coils in India
India produced 9.8 mn t of galvanised and color coated steel in FY'20. Out of this share of color coated steel/coils was 2.3 mn t. JSW remained the largest producer at 0.65 mn t followed by AMNS at 0.37 mn t. JSW Steel has got the approval of National Company Law Tribunal (NCLT) to acquire the bankrupt steel company Asian Colour Coated Ispat, as per recent reports. This happened after more than a year the latter's lenders approved the resolution plan. JSW Steel has offered INR 1,550 cr for a 1 mn t steel plant.