Local Indian hot rolled coil (HRC) trade prices have recorded gains on the back of a few large mills announcing “interim” base price hikes, but sentiments have become cautious as prices have been seen to be rising “too fast” triggering a slight fall in trade volumes, SteelOrbis learned from trade and industry circles on Monday, September 26.
Sources said that trade prices are up INR 500/mt ($6/mt) to INR 58,200/mt ($702/mt) ex-Mumbai and are up INR 750/mt ($9/mt) to INR 58,150/mt ($701/mt) ex-Chennai in the south. They said that a few large mills have increased HRC base prices earlier than expected, prompting trade channels to increase prices as they expect mills to go in for further hikes in base prices early next month.
“The base price hike so early has been an unexpected development and an indicator that mills will go in for phased increases instead of a big jump in one go. But the market is moving up too fast and hence trade channels are reacting by lowering fresh bookings from producers,” a Mumbai-based distributor told SteelOrbis, adding that “a major price correction is not imminent considering strong demand among end-users and bullish sentiments in infrastructure is spreading in the steel market. Higher prices are being absorbed, albeit in a low-trade market.”
Several market participants said that, considering that mills are going in for a phased revision of base prices, the aggregate increase could be larger than expected at around INR 2,000/mt ($24/mt) for October deliveries.
Meanwhile, market insiders have also continued to report higher volumes of imports of HRC. Thus, following numerous deals for ex-Asia HRC last week, including those from Vietnam, South Korea and China, a new deal for 30,000 mt of ex-Japan HRC is reported to have been done at $620/mt CFR for end-of-November shipment.
$1 = INR 82.90