After three consecutive weeks of gains, prices in the local Indian hot rolled coil (HRC) market have decreased by INR 1,200/mt ($18/mt) during the past week to INR 37,500/mt ($561/mt) ex-works, triggered by dealers taking a pause from booking activity and by the approach of festival holidays later this week, traders said on Monday, October 24.
“There is a feeling in the market that demand has been overestimated and that dealers have stocked up too aggressively. Most dealers have stayed away from making fresh bookings ahead of the Festival of Lights this coming weekend,” a Mumbai-based trader said.
“HRC prices have slumped also due to the uncertainty whether local steel mills will hike their base prices after the festival holidays,” the trader added.
Market sources said that HRC prices moved up too fast in just three weeks and the correction was anticipated though the downside from current levels is expected to be limited.
Although yet unconfirmed, two traders said that the continuous rise in HRC prices for three weeks resulted in transactions for imported HRC being concluded during the past week for November delivery - the first such import deals concluded over the past several months.
However, the two traders were not able to provide details of the import transactions, except for mentioning that the landed price adjusted for the minimum import price was still lower than domestic HRC prices.
$1 = INR 66.84