Local Indian hot rolled coil (HRC) prices have gained INR 750/mt ($10/mt) to INR 39,050/mt ($542/mt) ex-works as some domestic large integrated steel mills have hiked base prices effective March 1, 2020, but trading volumes have shrunk with both market intermediaries and end-users avoiding fresh bookings at higher prices, SteelOrbis learned on Monday, March 2.
Domestic steel companies like JSW Limited and Tata Steel have increased their HRC base prices very early in the month and others are expected to follow suit over the next few days.
However, sources said that several western India-based traders are attempting to liquidate stocks as the end of the fiscal year approaches, offering discounts of INR 500/mt ($7/mt), which reflects the slow movement of stocks and market resistance to higher prices purely on cost pressure basis rather than on account to demand.
“Steel mills are taking a short-term view of prices. If there is any revival in ex-China imports in the current month, we will have to take another look at our prices also factoring in how stocks move,” a manager at JSW Limited said.
Market sources said that Indian GDP falling to 4.7 percent in the third quarter of the current fiscal year, a seven-year low, and the forecast of it worsening in the last quarter in reaction to the impact of the coronavirus have ruled out any immediate revival in demand and higher prices are unlikely to be sustained. In view of this, market intermediaries are not willing to make fresh bookings, with a section of market expecting steel mills to roll back their price increase as they face an inventory build-up.
$1 = INR 72.00
