Local Indian hot rolled coil (HRC) prices have remained stable during the past week at around INR 35,500/mt ($570/mt) ex-works in an inactive market with buyers staying away ahead of the country's federal budget later this week, traders said on Tuesday, February 24.
"Transaction volumes are dramatically low with most market participants awaiting indications from the budget as to how the government intends to boost the sluggish manufacturing sector," a Mumbai-based trader said.
"Buyers are also awaiting possible changes in tariffs including import duties on HRC and possible subsequent adjustments of local prices by domestic mills before they decide to conclude fresh transactions for either imported or local HRC," the trader added.
Sources said that the local HRC market is on a knife-edge and can move in either direction depending on whether the government increases the import duty on HRC or not.
On the one hand, there has been a spurt in imports of HRC, while on the other local mills have almost stopped exports, unable to compete with Chinese products, resulting in oversupply in the domestic market. A hike in India's HRC import duty to 10 percent from 7.5 percent could lead to a modest revival in buying interest for local flat products, the sources added.
$1 = INR 62.31