Indian hot rolled coil (HRC) prices have remained stable since last week at INR 34,000/mt ($631/mt) ex-works, with the support of firmer offers from China and South Korea, traders said on Friday, September 21.
"Higher volume bookings for ex-China and ex-Korea HRC in India compared to previous week and stable domestic prices despite higher import booking volume may be seen as tentative indicators of improved demand," a Mumbai-based trader said.
"Ex-China HRC export offers have gained another $5/mt, reaching $535/mt CFR Mumbai. Import bookings of about 30,000 mt were reported in Mumbai for October shipments," the trader said.
"Last week ec-China HRC offers to India had increased by $5/mt to levels of $530/mt CFR; however importers had not concluded any booking, anticipating a reversal in price trend. But with reports that even ex-factory price of HRC in China are on the rise, Indian importers have started to make purchases at current lower levels," he added.
HRC export offer prices from China and South Korea have fluctuated sharply during September, with both downward and upward trends confusing the market, according to an eastern India based flat steel trader.
Import bookings have increased towards the end of the current month, possibly because importers are no longer adapting a wait-and-see stance, and this has resulted in a firmer demand, he said.
"The pressure on domestic producers to reduce their HRC prices may have eased during the week with higher import offers. But domestic prices still have downside risk of INR 1,000/mt ($18/mt) because of significant gap between import and domestic prices in rupee terms," he added.
The Indian rupee has lost 0.7 percent against the US dollar to INR 54.39, the sharpest decline since July 23 and the currency weakening provided domestic producers a level of comfort, according to an economist associated with India's Ministry of Steel.
Protection from imports thanks to currency rate was unpredictable as Indian government's spate of economic reforms announcement, this week, could increase dollar inflow and stabilize the rupee. But the government's reform measures are still in progress and susceptible to domestic politics, he added.