Major Indian steelmakers announced price hike this week, with state-owned companies Rashtriya Ispat Nigam Limited (RINL) and Steel Authority of India Ltd (Sail) announcing revised prices on Thursday.
RINL, also known as Vizag steel, has raised rebar prices by Rs3,000/mt ($40.68/mt) for December deliveries, officials informed Davis Index. The State-owned company also raised the prices of other long products, including wire rod, by Rs1000-2,000/mt ($13-27/mt) for the month.
Following this hike, rebar prices now stand at Rs45,500-46,000/mt ex- stockyard, Vizag, while dealers are selling at around Rs47,500/mt there.
Sail raised prices in long products by around Rs3,000/mt and flat products by Rs3,500-4,000/mt, depending on the region. Hot-rolled coil prices stands at around Rs45,200/mt ex-plant, Bokaro.
A few days ago, JSW Steel increased prices of flat and long products by Rs2,000-3,000/mt while JSPL raised prices by Rs1,800-2,000/mt across all products.
The sharp domestic price hike is due to various factors –
- Increase in international steel prices by about $40-50/mt in the last couple of weeks which got reflected in the domestic market.
- Higher iron ore prices in the international market which is in line with multiple price hike in the domestic market. International iron ore prices are still holding at $125-130/mt due to strong recovery in Chinese market. As per latest World Steel Association (WSA) figures, China’s crude steel production has grown by 12.7pc in October 2020 compared to prior year.
- India’s state-owned National Mineral Development Corporation (NMDC) has also raised iron ore prices by Rs500/mt ($6.77/mt) for December deliveries. They had hiked the price twice in November.
- Strong domestic demand coming from all major sectors including infrastructure and construction sectors has outpaced supply. Industry leaders believes that there is scope for another price hike in December due to strong order book till January and limited import opportunity.
- The price rise is also supported by a similar price revision by secondary producers in the domestic market. In Mumbai, rebar prices rose by about Rs5,000/mt since the beginning of November.
($1=Rs73.73)