Steel mills in India remained onward bound with INR 500-1000 per tonne hike in TMT prices across the region. After roller coaster in flat product price levels been hiked by about INR 700-1000 per tonne (cumulatively INR 4000 per tonne since January).

Even though long market has not been really happening mills could risk price hike despite slow demand from construction sector owing to shortage.

It is reported that most of the mills are running low on smaller size TMT. At the same time some majors are unable to provide for domestic buyers owing to over commitment in export. Input cost hike notwithstanding owing to shortage of iron ore and freight hike primary mills have been disadvantaged by going slow in price hike vis-à-vis secondary manufacturers.

Secondary mills have been sitting on high price levels on traction owing to high pencil ingot levels despite wails of poor demand. Typical gap of INR 3500-4000 per tonne between secondary and primary price levels was closed to demeaning levels of INR 2000-2500 per tonne at most locations in North and Central India.

With the present price hike mills have made an attempt to correct the aberration. However the going will be tough with international scrap prices plummeting taking the excuse from secondary furnace owners of cost escalation putting pressure on them to reduce price level. At the same time slow demand from construction and project will be persistent owing to parliamentary elections forestalling new projects owing to code of conduct in the government sector. Lack of credit in market is malignant malaise unlikely to recede in the coming months.