After three consecutive weeks of downward movement, the local Indian hot rolled coil (HRC) market has returned to stability in the past week, with prices remaining unchanged week on week at INR 41,500/mt ($623/mt) ex-works amid low market activity as participants await a price direction for the current month from local steel mills, traders said on Monday, March 6.
"It is still not clear whether the current stability is because of HRC prices having bottomed out after three weeks of losses or whether it is just a pause before the next downturn as end-use demand remains low," a Mumbai-based trader said.
"Also, most market participants are not concluding any fresh deals as there is a lot of uncertainty over steel mills' pricing strategy for the current month," the trader added.
At least two other traders said that there are conflicting expectations in relation to steel mills' pricing for March-April deliveries.
While one section of the market is expecting a downward adjustment to base prices in view of high mill-end inventories, another section feels that steel mills will be compelled to hike their base prices amid the continued rise in input prices.
Unless a clearer picture emerges in relation to short-term pricing trends, dealers will remain on the sidelines, the traders added.
According to market sources, some traders in the western and southern Indian markets are reported to be offering discounts of around INR 500/mt ($7/mt) to liquidate stocks and maintain cash flows.
$1 = INR 66.65