Local Indian hot rolled coil (HRC) prices have remained stable at higher levels of around INR 39,500/mt ($634/mt) ex-works in the past week against a background of tepid domestic demand and strong export transactions in the Gulf region, traders said on Wednesday, November 27.
According to two Mumbai-based traders, the volume of transactions in local markets has continued to be depressed with no discounts on offer as most mills have kept their base prices unchanged during the week.
Most distributors in the domestic market have been carrying inventories above comfortable levels and hence they are cautious about concluding new bookings, the traders said.
However, market sources stated that there has been strong demand from buyers in the Gulf Co-operation Council (GCC) region and there have been reports of export deals concluded in the range of $580-600/mt CFR for January shipments, which have emboldened steel mills to keep their local prices unchanged despite weak demand.
The sources said that large steel mills like JSW and Essar have been pushing volumes to overseas markets to maximize foreign currency earnings which would enable them to hedge against their rising costs of coking coal imports.
Two traders told SteelOrbis that, even though the total volume of Chinese shipments to the GCC market was higher, Indian HRC has gained in competitiveness since reports received indicate that export rebates offered to several Chinese HRC exporters have been withdrawn, prompting Indian mills to be aggressive and to push for an increased market share by offering discounts of between five and seven percent on HRC export offers.
$1= INR 62.34