Indian hot rolled coil (HRC) prices have failed to hold on to their gains of the previous week in face of a stronger rupee and a fall in import prices forcing major domestic mills to cut prices by INR 2,000/mt ($34/mt) to INR 32,000/mt ($606/mt), traders said on Friday, October 12.
"Cheaper imports resulting from the steady appreciation of the rupee against the dollar completely wiped out the INR 1,000/mt ($19/mt) increase in domestic HRC prices. The trend of domestic prices being supported by the weakening of the rupee was completely reversed this week," a Mumbai-based trader said.
"Producers and traders were left with no option but to cut prices even though the supply side remained tight," the trader said.
The Indian currency has gained INR 3 against the dollar since mid-September following the Indian government's spate of policy measures to boost foreign investor confidence. The rupee closed at INR 52.67 against the dollar on Thursday, after its highest gain in a fortnight.
"With demand firming up ahead of the festive season, Indian HRC producers are banking on reducing prices to take on cheaper imports and stabilizing margins through volume bookings," a trader in Kolkata said.
"Japanese HRC offers have been reported in the market at $540/mt but there have been no bookings, with Indian importers anticipating a further fall in international prices and continued appreciation of the rupee," he added.