The flat steel product market in India continues the musical note into New Year. With 3% gain in HRC prices within a week it is clear the windfall is there to stay.

PI - Product Index
(Source: www.steelprices-india.com)

The reasons are aplenty but the most prominent appears to be speculation as traders stockiest vie to amass volumes keeping up the ante. So brisk has been the roller coaster ride that some of the prominent mills have revised the prices mid term to capitalize on the bolstered sentiments.

Speculative demand
1. Actual demand from white good, automobile and projects before the budget and closure of FY 2010-11.
2. Spike in coking coal and coke prices
3. Import offers being prohibitive and long lead times finding few takers.

It is learnt that some Indian steelmakers lifted their base prices of hot rolled coil again this month over early January levels. With this, domestic offers for 2.5 mm commercial grade HRC average INR 35500 per tonne ex Mumbai excluding ED & VAT

Indian steel majors have hiked their EXW prices by up to INR 2500 per tonne in phases although majority of them have settled for hike of about INR 1500 per tonne.

With the global levels piercing the roof, as most of the mills are booked for February and new offers are for March production April delivery, none of the traders are ready to commit for such lengthy lead times.

The multiplicity of factors has given ample opportunity to Indian mills to adopt opportunistic behavior. However the only catch is that in this blind opportunism the mills prices have exceeded market levels in some regions, whereas stockiest traders already decked to the brim are reluctant to buy further till they offload the current inventory. This paradox might force the mills to correct prices in the coming weeks.

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
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4. Others - Pipes

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Price basis
Without ED and VAT for all products except for rebar and sections

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(Sourced from www.steelprices-india.com)