India’s primary steel mills have increased flat steel prices by Rs500-750/mt ($7-10/mt) for July deliveries due to rise in input costs and limited availability of finished steel products as mills decided to lower production amid an increase in COVID-19 cases near their units.
JSW Steel hiked flat products price by up to Rs750/mt, depending on the grade for July deliveries, learnt Davis Index. Other primary mills like the Steel Authority of India (Sail), Tata Steel and JSPL are likely to follow the suit.
Meanwhile, RINL or Vizag Steel, which majorly long products, has offered discounts to increase sales volume in July as reported by Davis Index. Market participants said primary steel players are also facing low demand in the long products segment due to heavy monsoon which that slowed work in construction sector, in addition to the impact of COVID-19.
Primary mills are actively exporting steel to offset demand in the domestic market. India exported 3.26mn mt finished steel in Apr-June 2020, an increase of 145pc year-on-year. Hot-rolled coil (HRC) price in Mumbai is Rs36,500/mt.
Rise in input costs
Primary steel manufacturers are facing margin pressure as National Mineral Development Corporation (NMDC) raised iron ore prices by Rs200/mt ($2.65/mt) in early July looking at higher prices in the international market as prices above $100/mt cfr China is driving a healthy demand.
In Apr-May, ore traded at $80-85/mt as Brazilian miner Vale suspended operations after its workers contracted COVID-19.
$1=Rs75.44