Last week, Indian domestic hot rolled coil (HRC) prices have maintained their rising trend, gaining around INR 250/mt ($5-8/mt) since previous week, reaching INR 35,500-35,750/mt ($644-649/mt), as supplies have continued to be tight and with import offers being rejected, traders said.
"There are supply issues from major steel mills and traders are stocking up anticipating continued upward movement in prices," a Mumbai-based trader said.
"HRC price consolidation is also supported by reports of import offers ex-South Korea and ex-CIS being rejected. Market reports state that there are no import shipments scheduled for January, with traders preferring to stock local HRC," the trader said.
According to market sources, ex-China offers are being quoted at $590-600/mt CFR Mumbai and no bookings have been reported in the market, since $50/mt difference between domestic prices and import offers was not sufficient to provide an attractive net price after adding import duty of 7,5 percent, freight cost from port to stockyards, local levies for inter-province shipments and mostly because of continued depreciation of the rupee against the US dollar price quoted.
Even with Indian steel mills cancelling all discounts, local traders and end-users are stocking domestic HRC and prices are holding firm, the sources said.
According to an official in an eastern India-based steel mill, holidays and end-year considerations will lead to a fall in import offers and this may result in an increase of $10-15/mt in local HRC prices.
Steel mills are already considering upward adjustment of the base HRC price by $10-15/mt around the middle or end of January if the market continues to absorb higher prices, the official added.