India’s primary mills have increased benchmark hot rolled coil and cold rolled coil prices between ₹500 per tonne and ₹1,000 per tonne for early-to-mid January deliveries. Increases are to the tune of three-five per cent and are spread across categories. 

The price rise comes on the back of resumption of exports beyond the EU, rise in coking coal prices and some slowdown in imports. This incidentally is the first major hike announced by the mills in this fiscal. The last such big ticket hike was in Jan 2023 (Q4 of FY23). 

Market sources say, price of hot rolled coils (HRC), announced at the mill level, stands at around ₹56,500 - 59,000 per tonne; while cold rolled coil (CRC) prices are in the ₹61,500 - 63,000 per tonne range. 

However, spot market prices continue to hover around ₹55,500 per tonne range, more or less in line with market expectations. Spot prices recovered slightly from ₹54,500 - 55,100 per tonne levels. 

Also read:India remains net steel importer amidst rising shipments, imports outpace exports

Sources say, it is yet to be seen if mill level price hikes are passed on and also absorbed in the spot markets. 

Provisional data show, stock variation levels for April - Dec 2023 was 28,25,000 tonnes; higher than 20,82,000 tonnes in the year ago period; indicating more finished level inventory being available in the market. 

Cost of Raw Materials Up

Mills have reasoned their price hikes on grounds that there was a monthly average cost increase in price of raw materials like iron ore and imported coking coal. 

Australian hard coking coal prices are at $336.25 per tonne on January 9; as against average price of $326 per tonne in December. Platts reported earlier the Asian metallurgical coal continued to tense up in January. 

The monthly average price of Odisha iron ore index (0-10mm Fines, Fe 62 per cent) stood at ₹5,220 per tonne ($ 63/t) for early January, up over ₹300 per tonne ($ 5/t) against a month-back. .

Import - Export scenario 

The pressure around cheaper imported alternatives entering the market is slowing down, as per data maintained by the Steel Ministry.  

Research firm, BigMint (formerly SteelMint) in a report said, bulk HRC-plates import volumes dropped to 0.53 million tonnes in December 2023, which had peaked at 1.085 million tonnes in November last year. There’s also less new import bookings from China for the Jan-Feb shipments, as prices started moving up from October-end until Nov-end. Prices were around $575-580 per tonne, up from previous lows of $520 per tonne. 

Exports in the Middle East (ME) have resumed with India quoting a price of $630 -640 per tonne ; while in European markets, offers are at $695-700 per tonne.

“Improvedsentiment gradually emerged in the market amid expectations of better demand for Jan - Mar quarter, which is historically seen as a stronger one for the mills. Platts assessed the spot price of HRC, to be at ₹55,000 per tonne,” said a market participant.