Local Indian hot rolled coil (HRC) trade prices have continued to consolidate at higher levels riding on improved trade volumes, with distributors increasing restocking ahead of the festival season, amid the sustained robustness of end-user demand, and with mills expected to go in for another base price hike within a few days, SteelOrbis learned from trade and industry circles on Monday, October 2.
Sources said that HRC trade prices have gained INR 700/mt ($8/mt) to INR 58,900/mt ($708/mt) ex-Mumbai and are up INR 1,000/mt ($12/mt) to INR 59,150/mt ($711/mt) ex-Chennai in the south. Following the “interim” base price increase by mills last week, distributors have been quoting higher prices and market expectations are that in another week base prices could be increased further by at least INR 1,500/mt ($18/mt) across the flat product segment.
However, a section of market participants has expressed caution over a possible slight correction setting in, based on the fact that prices have increased too fast in too short a span and with the long festival holiday season ahead likely leading to a fall in trade activity. Another section of the market maintains that any downside risk to the price-line would be limited by robust end-use demand and a slight tightening of supplies even though mills are now operating at optimal capacity utilization levels.
“Despite some normal trade level variations, prices will remain strong through the rest of the fiscal year on the strong performance of the manufacturing sector. Any base price increase by producers will be absorbed by the market,” a Mumbai-based distributor told SteelOrbis.
“We see the next target price at INR 61,000/mt ($733/mt) in the medium term. The domestic price is currently at a 8-10 percent premium over the landed price of imports. But even a slight rise in imports is unlikely to impact local prices much because domestic demand increased 17 percent in August and 13 percent over April-August of the fiscal year 2023-2024 and this will absorb the impact of the import competition,” he added.
$1 = INR 83.20