Prices of HRC in the international market have jumped by at least $15 per tonne, and in some cases by $25 a tonne like in the US, in March after remaining almost stable since December.

The marketing chief of an integrated steel maker said: "This is good news for all HRC makers. The export markets now will definitely become more attractive."

Analysts said that the recent price spurt in March will come as a major breather for HRC players who have large export commitment under the EPCG scheme.

Industry officials attribute the price rise to three primary reasons. According to the figures provided by the International Iron & Steel Institute, Brazil, global production in January/February has dipped almost 8 per cent over the last year.

At the same time, as some of the Asianeconomies have begun to recover, demand from these high consumption markets have also picked over the last couple of months. These countries, industry officials pointed out also happen to be the traditional export markets for the Indian steel companies.

Industry officials said that domestic steel companies will also be able to target the US and European Union markets. While the US has imposed anti-dumping duties on HRC from Russia, Japan and Brazil, the EU has imposed quantities restrictions.

From a high of around $345 a tonne in June last year, international prices had dipped to around $210 a tonne in November, before stabilising at around $205 a tonne in December.

Industry sources however see no possibility of any price increase in domestic HRC prices in the short-run. Prices of HRC has increased by around Rs 800-1,000 a tonne in January following the imposition of a floor price on imports of HRC at $302 a tonne. The commerce ministry, on the insistence of the downstream players, is consideringlowering the floor price further to around $267 per tonne.

INSIGHT

Higher international prices are driven by supply cuts and appreciation of some of the currencies such as the Korean won. As such, it does not affect the supply-demand scenario in India, and hence the price in the Indian steel market. This is because even if the international prices are low - the logistical and infrastructure support for importing more than 1.5 million tonnes into India does not exist.

The beneficiaries of the rise in international prices could be players such as Essar, Ispat, Jindal who have to fulfil export commitments because of imports of capital goods under EPCG schemes. In addition, if price rise in HRC also pushes up the raw material prices, such as pig-iron, then we can see companies such Goa Carbon starting its new plant and players such as Tata-Metallics, Usha Ispat will begin to come out of the red.