After a brief pause, the local Indian hot rolled coil (HRC) market has resumed its upward movement, with prices increasing by INR 1,000/mt ($16/mt) during the past week to INR 37,500/mt ($585/mt) ex-works, amid expectations that steel mills will announce a second base price revision during the current month, traders said on Monday, August 21.
Sources said that, after hiking base prices by INR 1,000/mt ($16/mt) early in the current month, the market expects Indian steel mills to announce another INR 1,000/mt ($16/mt) increase before the end of this month - resulting from strong export shipments over the past two months.
The sources said that, while domestic demand continues to remain tepid, steel mills are receiving large export orders for flat products from the Southeast Asian markets and, given the strengthening of international finished steel prices, are adopting “import parity” pricing for domestic sales too.
“According to government data, Indian finished steel exports are up about 64 percent in July 2017 compared to the corresponding month of the previous year. But I am not sure whether a domestic pricing strategy based on exports and international prices can be sustainable as domestic manufacturing growth has not showed any sign of revival over the past several quarters,” a Mumbai-based trader said.
$1 = INR 64.10