The flat product market in India has been the proverbial Achilles heel recently.
The international prices saw variations in the concurrent period bulking by USD 30 per tonne to INR 50 per tonne. Indian mills who were reactive by increasing prices in October on the back of a reverberating global market on the verge of peaking have failed to capitalize the parity advantage over the last 1 month.
The peculiarity of depression has been the prices have remained at a low level INR 35000 plus VAT per tonne with minor fluctuations.
However the windfall appreciation in INR by about 6% within last couple of months has left an indelible mark on the flat product market. Import levels already receding since end September as Europe, Middle East and China remained subdued latched onto rupee appreciation giving it a cutting and killing edge over the domestic levels.
HRC
| Location | Change |
| Mumbai | -2.0% |
| Chennai | 4.0% |
| Kolkata | 0.6% |
| Delhi | -0.4% |
| Ludhiana | 0.0% |
| Ahmedabad | -1.3% |
| Indore | 0.8% |
| Bangalore | 0.0% |
Change is on 29th October as compared to 1st October 2010
It is learnt that import offers in the range of USD 590 per tonne to USD 610 per tonne CNF Mumbai are aplenty with transactions taking place on the lower band.
Market sources inform that recently a HRC parcel of 30,000 tonnes in rolling grade was booked at USD 600 per tonne by global steel major from a Canadian mill with November end delivery.
Moreover the seepage of old stock (200,000 tonnes) at Mumbai has crippled the fledgling market sentiment.
The magnitude of this danger can be gauged from the fact that imported HRC is available at Delhi for INR 34000 plus VAT per tonne. With local mills still touting figures of INR 35000 plus VAT per tonne switching loyalty is an endearing proposition.
Market is characterized by surplus finished product and stockiest inventory scuttling the buying activity.
In a rear guard move some mills have made mid term correction of INR 800 per tonne to preempt the damage. It also learnt that in the Northern region one new player has aggressively introduced HRC from its new mill in Orissa at INR 34500 per tonne plus VAT breaking from the ranks.
The import parity between figures looks more ominous from a week ago with a gap of INR 3452 per tonne. Domestic levels at Mumbai is INR 32600 per tonne plus ED and VAT
| | In USD | IN INR |
| CFR Price | 600 | |
| Custom Duty | 34 | |
| Port Expenses | 10 | |
| Landed at Mumbai Port | 644 | |
| MODVAT | 95 | |
| Inland Transport | 10 | |
| Total landed | 748 | 33376 |
| Net of MODVAT | 654 | 29148 |
USD: INR =44.60
(Source: www.steelprices-india.com)
A price reduction to the tune of INR 1000-1500 per tonne looks inevitable in November to provide crutches to the Indian mills lest they recede into oblivion.
www.steelprices-india.com is a comprehensive portal that provides domestic pricing information for benchmark steel products in each category at select location in India on a regular basis 5 days a week and international price levels on a weekly basis.
As steel in each category comes in hundreds of grades shapes and sizes, we have taken benchmark products in each category at select locations to cover the entire basket of garden variety of steel products including input material for steel making and processing.
Products covered
1. Input materials - Iron ore, scrap, sponge iron, pig iron pencil ingot, billets and blooms
2. Long products - Rebar, wire rod, angle, channel and joists
3. Flat products - Narrow plates, wide plates, HR, CR and galvanized
4. Others - Pipes
Methodology and access
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2. Base prices or effective, as per market trends
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4. On fixed market oriented payment terms
5. Daily updates
6. Data available since July 2008
5. Access through web site
Price basis
Without ED and VAT for all products except for rebar and sections
The prices are displayed on weekly and monthly basis. They also have search facilities to access old data from the archives. Graphical representation of trends and comparison of price movement 2 or more products is also available.
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Other features include converters for weight, length etc, glossary and advanced search functions. The benchmark product price information is supplemented by global pricing news.
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| Currency | Single | 2-5 | 6-12 | 13-25 | 26-40 | 40-60 |
| INR | 66,000 | 132,000 | 220,000 | 440,000 | 660,000 | 880,000 |
| USD | 1,650 | 3,300 | 5,500 | 11,000 | 16,500 | 22,000 |
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