Local Indian hot rolled coil (HRC) prices have moved up by INR 500-1,000/mt ($9-18/mt) over the past week to consolidate at higher levels of INR 36,250-36,500/mt ($675-679/mt) ex-works, with some steel mills increasing prices, but the market is resisting the increases with low volume bookings, traders said on Thursday, February 14.
"Some steel mills like JSW Steel have tested demand by increasing their domestic price of HRC by $19/mt. Others are waiting in the wings to see the market reaction before doing the same," a Mumbai-based trader said.
"One indication of the market resisting the price rise was the sharp fall in volumes being booked by traders over the past week and a half, while stockists have not been willing to carry inventories anticipating low demand," the trader said.
According to market sources, imports ex-South Korea and ex-Japan have been negligible with offers a shade above $650-660/mt CFR Mumbai and the landed price is not attractive and has not offered competition to local HRC, prompting Indian mills to seize the window to increase prices.
However, the sources said that steel mills are keeping a close watch on the low off-take by distributors/traders and, if other large producers like Steel Authority of India Limited (SAIL) or Tata Steel refrain from increasing prices, the steel mills who have announced higher prices will be forced to pare down their price hikes by $9-10/mt or give equivalent discounts to push volumes into the market, before the current month ends.