Local Indian hot rolled coil (HRC) prices have remained stable during the past week at INR 35,500/mt ($530/mt) ex-works amid low transaction volumes as market participants have been unsure of the short-term pricing of local steel mills, traders said on Monday, May 23.
“There has been a lack of activity in the market. Most dealers are not sure whether local steel mills will actually announce a second round of price increases before the close of the current month,” a Mumbai-based trader said.
“At the same time, most dealers which had completed their restocking earlier in the month have a markedly reduced appetite for fresh bookings,” the trader added.
However, at least two other traders said that, following the price hike of INR 500-1,000/mt ($7-14/mt) earlier in the month, there have been some forces of correction in the market with dealers in the western Indian market reportedly offering discounts of INR 200/mt ($3/mt) to manage their own inventories, indicating that the market might not be in a position to absorb the price increases.
The sources indicated that, if local mills resort to another price increase before the end of the current month and with most dealers already carrying large inventories, discounting may spread to most other regions too.