Indian Steel Mills Announce Roll Over in Flat Steel Price for Apr'20

Major Indian steel mills have announced roll over in their flat steel prices for Apr'20 deliveries, SteelMint learned from its sources. However, trades are not taking place currently due to lock-down, the trade sources are of the view that price clarity will come post the trade activities return to normalcy. The effective price for HRC (2.5-8 mm, IS2062) stood at INR 39,500/MT (ex-Mumbai), and that of the CRC (0.9 mm, IS 513, GR) at INR 44,500/MT (ex-Mumbai). Prices mentioned above are basic, and extra GST @18% is applicable.

Indian steel mills keep flat steel prices unchanged due to following reasons:

1. Mute demand in the domestic market- The nation-wide lockdown with effect from 25th Mar'20 to contain the spread of COVID-19 contingent has resulted in silent demand in the country. As a result, trade activities came to complete halt and Indian govt imposed strict restrictions on transportation.

2. Few steel mills scale down their operations- Few steel manufacturers like JSW, AM/NS, Tata steel, and govt owned SAIL have scaled down their operations owing to limited manpower and lesser availability of equipment to operate the furnace. Thus, mills are watching the situation closely and shall ramp up the production when the conditions improve.

3. Automobile majors suspend operations- Maruti Suzuki, and Hyundai Motors announced a suspension of their plants towards the end of Mar'20 due to COVID-19.

4. Increase in inventories- Domestic sales have stalled due to unplanned lockdown announced in India. Thus, low capacity utilization and increased stocks pushed mills to keep the prices stable for this month. However, few steel mills are exploring export options to ease out their inventories, and mitigate the losses from domestic sales.

Market participants shared with SteelMint that, "Indian steel mills have kept the price unchanged just to keep the momentum going."

In Mar'20 major Indian steel manufacturers raised steel prices by INR 500-700/MT on the back of an increase in coking coal prices along with the absence of active imports from China amid COVID-19 issues.