Local Indian hot rolled coil (HRC) trade prices have remained stable over the past week and optimism over continued consolidation at higher price levels has been muted slightly by the resumption of large-volume import bookings for mainly ex-Asia HRC.
Specifically, HRC trade prices are stable at INR 56,400/mt ($683/mt) ex-Mumbai and are unchanged at INR 55,600/mt ($673/mt) ex-Chennai in the south.
According to sources, despite brisk trade activity and strong bookings by trade channels ahead of September base price increases by mills, the trade price upward movement has been checked by the emergence of large-volume import bookings by both traders and end-users.
Market reports indicate that around 100,000 mt of ex-Vietnam HRC was booked over the past week at around $585/mt FOB, or in the range of $610-615/mt CFR. This would translate into a landed price in the range of around INR 53,000/mt ($642/mt) in Mumbai and still at a significant discount to local trade prices.
Sources said that ex-South Korea import HRC bookings have also been reported over the past five days, although the aggregate tonnage was lower at around 30,000 mt at the average price of around $600/mt CFR, maintaining a strong discount compared to local prices and offering renewed import competition to local mills.
Besides, according to sources, last week around 30,000 mt in total of Chinese HRC were sold in India at $585/mt CFR.
“The resumption of imports brings some headwind to the recent strong surges in local prices. Our assessment is that higher imports are the result of the local market being in a short supply situation, but this will ease as some mills under maintenance shutdowns will resume operations over the next two to three weeks,” a Mumbai-based distributor said.
“Over the current quarter, higher supplies from local mills and imports will be absorbed by the market. However, the upside movement of prices can get slightly slower,” he said.
At least two large traders said that the market consensus at present is that local mills will be considering at least a INR 1,500/mt ($18/mt) increase in base prices for September deliveries.
$1 = INR 82.60
