Local Indian hot rolled coil (HRC) prices have remained stable during the past week at INR 39,500/mt ($612/mt) ex-works, but the outlook remains negative, traders said on Monday, May 29.
"Indian HRC prices have stabilized after declines in the previous three weeks, but the outlook continues to be negative as few buyers are willing to step up their purchases without any demand support," a Mumbai-based trader said.
"Month-end considerations have also weighed on the minds of market participants. Despite the absence of any demand uptick, Indian steel mills are expected to keep their base prices stable during June. Clearly the market is in no mood to absorb higher price levels and hence the fall in overall activity," the trader added.
At least two other traders pointed out Indian steel mills will keep their base prices unchanged buoyed up by the modest recovery in HRC export opportunities. They pointed out that some of the large domestic steel mills have increased their HRC export offers by $15/mt on FOB basis to offset the fall in margins from the appreciation of the Indian rupee against the US dollar and have been helped by the rise seen in Chinese HRC export offers.
If the large Indian mills succeed in pushing HRC export volumes, there will be less pressure on them to adjust their local HRC base prices, the traders added.
$1 = INR 64.55