Indian local hot rolled coil (HRC) prices have remained steady over the past week at around INR 41,000/mt ($682/mt), ex-works due to re-stocking by dealers ahead of price hike by domestic steel mills, traders said on Wednesday.
According to a Mumbai based trader, despite tepid demand and moderate inventories, dealers were re-stocking as markets were confirmed that steel mills will increase their prices in early August.
"For the past two months we have been maintaining our base price despite input costs rising. There is no holding back price increase in August," said an official at an eastern India based steel mill.
"Most mills have completed their pricing strategy. I believe that steel mills' price increase would be in the range of INR 500-1,000/mt ($8-17/mt)" he said.
"It is estimated that cost of production has gone up by INR 1,600/mt ($26/mt) on account of increase in price of iron ore, coking coal, diesel and railway freight over the past two months," he added.
Market sources said that ex-China HRC offers at $560/mt CFR Mumbai evoked marginal interest among local importers who were cautious in making commitments for September shipments till local steel mills announced their domestic prices.
Since the anticipated uptick in HRC demand did not materialize in the current month, distributors were unwilling to built inventories of imported HRC, more so since the Indian rupee was consolidating above the INR 60 to a dollar mark, the sources said.
$1 = INR 60.14