Indian state-owned steelmaker Rashtriya Ispat Nigam Limited (RINL), also known as Vizag steel, has raised rebar prices by Rs1,500/mt ($20.24/mt) for rest of November deliveries, according to Davis Index sources. The company has also raised prices of other long products including wire rod by Rs500/mt ($6.74/mt) for the month.
RINL raised prices for the second time in November. The company had raised prices of all long products by Rs1,000-1,500/mt earlier this month. Following this hike, rebar prices now stand at Rs43,000-43,500/mt ex- Vizag.
Another state-owned company Steel Authority of India (Sail) also raised long products prices by Rs1,500/mt and flat by Rs750/mt. In the beginning of the month, it had raised long prices by Rs1,000/mt and flat by Rs1,250/mt. Also, JSW Steel increased prices of both flat and long products by Rs2,000-3,000/mt in two tranches in November.
The successive hike in finished steel prices is due to multiple factors. First, internationally steel prices have continued to maintain an uptrend. China’s HRC export prices are hovering around $550-560/mt, up from $515-520/mt in mid-October. Second, higher input cost due to increase iron ore prices have squeezed producer margins.
Third, strong domestic steel demand across sectors, especially automotive and white goods. Construction activities are also picking up. Besides, mills are focusing more on domestic market since August and have reduced exports due to higher realisation in local markets. In April-July, mills were active in the export market, for instance, Tata Steel exported around 50pc of its output in Q1; around 25pc in Q2 but in Q3 exports are expected to drop to 10-12pc.
Fourth, 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 Rs3,000/mt so far in the month.
RINL which had re-ignited its third blast furnace in October is operating at normal production level of around 7,000mt hot metal per day. Presently, the company’s hot metal production from all three blast furnaces is at 18,000-19,000mt per day.