Local Indian hot rolled coil (HRC) prices have remained stable during the past week at INR 41,500/mt ($689/mt) ex-works with some producers indicating they aim to keep prices unchanged in April, traders said on Thursday, March 27.
Two Mumbai-based traders said that, despite falling international prices of raw materials like coking coal and iron ore, several large steel mills have said that they will be maintaining their current price levels in April.
Although a section of the market is expecting downward price adjustments next month, steel mills like Essar Steel have said that they will keep their HRC prices stable even though demand and transaction volumes have remained subdued, the traders said.
According to government data, Indian steel consumption grew just 0.5 percent during April 2013 and January 2014, the slowest growth rate in the last decade.
Market sources said that the season for peak steel demand is almost coming to a close with elections round the corner and thereafter the monsoon season will be arriving.
However, steel mills are ruling out any adjustment to HRC prices even though the three price increases since January this year had not been absorbed by the market indicated by low volumes, the sources said.
Sources said that current offers for HRC of Chinese origin are reported to be at around $540/mt CFR Mumbai, while the landed price inclusive of customs duty, port charges and VAT is pegged at $700/mt and hence local steel mills are not facing any threat of import competition at current local HRC prices.