Local Indian hot rolled coil (HRC) prices have showed little change during the past week, remaining at INR 40,500/mt ($662/mt) ex-works amid divergent indications on base prices from domestic steel mills, traders said on Tuesday, October 14.
"Buyers have been postponing transactions as they wait for prices to settle," a Mumbai-based trader said.
"Ex-China HRC offers are being lowered, further widening the price gap between imported and local HRC. However, local steel mills have shown divergent reactions on the issue of adjusting prices," he said.
"Import competition from Chinese HRC is rising and only the weakening of the Indian currency has been preventing the conclusion of transactions for large import volumes. But the weakness of the Indian currency will not be able to block imports for long and buyers who have been delaying import transactions in anticipation of price adjustments by local mills are expected to start importing soon," he added.
Market sources said that over the past two months the price difference between imported and local HRC had exceeded the $100/mt mark and, if the Indian rupee exchange rate does not fall sharply below the current INR 61 to a dollar mark, traders will start to import HRC aggressively, as in the case of long products.
The sources said that during the past week import offers for ex-China HRC have declined further by $5-10/mt to the range of $510-520/mt CFR Mumbai.
However, at the same time, many local mills have been reluctant to react to the falling import offers, the sources said.
JSW Steel Limited has announced that it is lowering its flat product prices by INR 500-750/mt ($8-12/mt), but other domestic producers like Essar Steel, Steel Authority of India Limited (SAIL) and Tata Steel have said that there is no case for price adjustments at present since locally sourced input costs are rising.
An official at Essar Steel said that its prices are in line with domestic market conditions, while an official at Tata Steel said that demand for flat products is buoyant and that market conditions are looking up and hence no price adjustment is warranted. An official at SAIL said that the company would keep its prices for flat products unchanged even though some adjustments had been made for its long products.