Indian domestic hot rolled coil (HRC) prices have showed divergent trend during the past week, suffering a minor correction in northern markets, while remaining stable in others at INR 41,000/mt ($671/mt) ex-works, traders said on Tuesday, August 5.
According to a Mumbai based trader, HRC prices have weakened in range of INR 200-400/mt ($3-6/mt) in markets around Faridabad in northern India but have remained unchanged in western and southern markets.
The trader said that the anticipated demand had failed to materialize and local steel mills would be severely restricted in effecting planned increase in base price and hence prices have been undergoing some correction in north India.
Also, imports by northern India-based dealers are higher and imported HRC is reported to be available at around INR 39,000/mt ($638/mt) the trader said.
With international offers softening, the current narrow differential between imported and local HRC prices are expected to widen, putting downward pressures on domestic HRC prices, he added.
Market sources said that there is local supply issues in southern and western India which has enabled prices to remain stable but with demand and transactions volumes failing to show any uptick, pressures on prices could emerge later in the week.
Most dealers and traders are not committing transactions given uncertainties over pricing strategies of local steel mills.
Having deferred price increase since last month, local steel mill's leeway to do so in August has been limited by weak demand owing to season variations and this may impact mill's ability to pass on higher input costs to consumers, sources said.