HR steel coil prices soar

International hot rolled coil (HRC) prices have increased by $25 to $545 in a week's time, largely on the back of galloping raw material prices.

Industry sources said, international prices, which have been on the upmove for a while, increased to $545 last week.

The increase in prices was in tandem with the raw material price movement. Moreover, availability of raw material especially metallurgical coke had become a key issue for the steel players.

Over the past month, ferrous scrap prices increased from $260 to $325 and pig iron from $260 to $340. Metallurgical coke prices increased from $275 to $350.

If the prices of input materials is considered from last year, then the movement in prices appears to be even more dramatic.

Scrap prices have increased 124 per cent since July last year, pig iron by 119 per cent and metallurgical coke by a whopping 141 per cent.

Comparatively, HRC prices, during the same period, increased 92 per cent and cold rolled coils (CRC) by 61 per cent. HRC prices in the domestic market, at present, were hovering $520.

With international prices moving up, another round of price hike was expected at the beginning of next month.

Industry sources said, to keep up with the increasing raw material prices, prices would be hiked at the beginning of March.

"Raw material prices were increasing on a weekly basis in the international market" they said. However, most companies appeared to be covered for coke requirements, at least till March.

The crisis in availability of coke stemmed from China cutting down on coke exports to meet its own production requirements. Further, the flooding of Australian mines also added to the problem.

Industry representatives said, the only way the problem could be solved was by entering into a bilateral agreement with China, for a barter arrangement.

China was looking at iron ore resources from India. In fact, the Chinese Iron and Steel Association (CISA) had mooted such a proposal when the Indian steel team visited China.

However, the Indian government was not in favour of exporting iron ore from the country. The alternative option being weighed was adding value to iron ore and exporting semi-finished steel.