Local Indian hot rolled coil (HRC) trade prices have continued to seek lower levels amid the steady fall in business activity with the festival holidays approaching later this week and also due to the uptick in import competition.
Sources said that local HRC trade prices have slipped by INR 500/mt ($6/mt) to INR 56,000/mt ($672/mt) ex-Mumbai and are also down INR 500/mt ($6/m) to INR 57,050/mt ($685/mt) ex-Chennai in the south.
They said that, even while trade channels have been refraining from fresh bookings ahead of the holidays, there has been a rise in import bookings since late last month. According to trade estimates, about 100,000-120,000 mt of ex-China HRC bookings were reported during the last weeks of October, the landed price of which worked out to around INR 5,000-6,000/mt ($60-70/mt) over current trade price levels. Meanwhile, the latest offers for ex-China HRC with BIS certificates have been heard at around $595/mt CFR.
Notably, imports are seen to be rising despite the Indian government making it mandatory for importers shipping in non-BIS standard materials to seek prior applications from the ministry of steel.
“Large end-users are seeking imports as discounts to local trade prices are significant and offset the slight increase in the cost of securing approvals from the government if the tonnage is not compliant with standards of BIS. Though not confirmed, it is possible that local mills have so far deferred effecting base price rises due to higher imports and the dull local trade activity. But we think that it is just a pause and mills will take a call on base prices after the festivals,” a Mumbai-based distributor told SteelOrbis.
“The market is critically poised and can go in either direction. This will get clearer once business activity resumes in full after 10-12 days and mills give base price signals,” he added.
$1 = INR 83.30