Indian steel mills raise HRC list prices by up to 1,000/t for early-Jan'24 sales

The tier-I steel mills announced an increase in their list price tags of hot-rolled coil (HRC), HR-Plates and, cold-rolled coils (CRC) by INR 500-1,000/tonne (t) for the early-January 2024 sales. The increase in the raw material prices and the easing out of imported alternatives of the flat steel products from the distribution network are among the leading reasons for the price increase, hinted industry sources.

The effective list price levels for early January 2024 sales range as below for public and private mills:

HRC (IS2062, Gr- E250, 2.5-8mm)- INR 56,500-58,500/t exy-Mumbai

HR-Plate (E250, 20-40mm)- INR 59,500-65,000/t exy-Mumbai

CRC (IS513, Gr-O, 0.9mm)- INR 61,500-63,750/t exy-Mumbai basis

Coil-to-coil prices, INR 750/t extra for cut to length (CTL). Excludes GST at 18%.

Factors behind the price increase by mills:

Rise in raw material cost: The monthly average cost of raw materials like iron ore and imported coking coal increased by the end of December compared with the preceding month. The monthly average price of Odisha iron ore index (0-10mm Fines, Fe 62%) stood at INR 5,220/t ($63/t) ex-Mines by the end of December 2023, up by INR 308/t ($5/t) against the previous month's closure. On similar lines, offers for the imported, Australian-origin premium hard coking coal (HCC) also rose by $6/t m-o-m to $344/t CNF Paradip, India towards the end of December.

Imported alternatives drying up from the traders' market: The pressure around the cheaper imported alternatives entering the market started slowing down in December 2023. The bulk HRC-plates import volumes dropped to 529,661 t in December 2023, which had peaked at 1.085 million tonnes (mnt) in November in CY 2023, as per the bulk vessel lineup data maintained with SteelMint. Meanwhile, there has been less news about fresh import bookings from China for the January-February 2024 shipments, as the offers started increasing from end-October until the end of November 2023.

Current offers for Chinese HRC (SS400) export were assessed around INR 575/t FOB, Rizhao as of 2 January 2023, maintaining a 5-week streak of remaining stable. Offers from this country had started increasing from $520/t FOB as of 23 October.

Exports resume from India: The silence around offering HRCs for exports in the Middle East (ME) since 19 September broke towards the end of December when a private mill closed a deal of 20,000t HRC. The deal was closed at $635-640/t CFR, for delivery in end-January or early-February 2024. The HRC (S235) export offers are hovering around $695-700/t CFR Antwerp, in the European Union (EU) market. The bulk HRC-plates export volumes rose to 403,847 t in December, which was a shallow 47,688 t mnt in November in CY 2023, as per the bulk vessel lineup data maintained with SteelMint.