Indian hot rolled coil (HRC) prices have continued to firm up, rising by INR 500/mt ($10/mt) to INR 34,000/mt ($614/mt), ex-stockyard, with traders stocking up amid strong demand and expectations of a price hike by producers, traders said on Friday, November 23.
"Leading producers have indicated they will implement HRC price increases for December. Traders have increased their bookings in anticipation. An uptick in demand has also helped in pushing volumes," a Mumbai-based trader said.
"According to market reports, imported HRC, ex-China and ex-South Korea, have moved up $10/mt and are currently being offered at around $560/mt FOB. The higher base price along with the depreciation of the rupee has also been providing price support for domestic HRC," the trader said.
Ex-China offers of $560-565/mt FOB have been rejected by Indian importers, market sources said.
According to a Kolkata trader, the market is expecting supply side issues to emerge over the next few months since several major domestic mills have been facing problems of sourcing iron ore and production fall is a distinct possibility.
"One of the major complaints of steel mills which has also been conveyed to the Ministry of Steel is that iron ore miner NMDC has been exporting ore to Japan as a price (in dollar terms) lower than its domestic selling price," the trader said.
An official at an eastern Indian steel mill producing HRC said, "Producers are looking at a price increase of INR 1,000 ($20/mt) to offset higher raw material prices and the coming month would be a good window to effect it since the market would be able to absorb the impact."