Steel Sector Update - Domestic Mills Hike Prices To Close The Gap With Imports: Motilal Oswal
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Motilal Oswal Report
As was expected, Indian mills have raised flat steel prices in June 2021 to close the gap with regional prices, which had rallied sharply in the first fortnight of May 2021.
Prices have been raised by ~Rs 3,000/tonne for hot rolled coil and ~Rs 5,000/tonne for cold rolled coil.
Average HRC prices for Q1 FY22 are ~Rs 11,000/tonne (20%) higher QoQ, which implies another record Ebitda quarter for flat steel producers.
Domestic HRC, now at Rs 70,000/tonne ($960/tonne), is still at a discount of ~10% to import parity prices.
However, this might be the last of the hikes in India as China’s domestic and export prices have corrected sharply in the last fortnight, posing a risk to regional prices.
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