Local Indian hot rolled coil (HRC) prices have gained ground in reaction to large mills hiking flat product base prices for November and amid expectations for the implementation of antidumping (AD) or some other tariff protection measures by the government, SteelOrbis learned from trade and industry circles on Monday, November 11.
The sources said that large integrated mills have increased HRC base prices by INR 800-1,000/mt ($9-12/mt) for November deliveries and, in reaction, trade prices have inched up INR 1,200/mt ($14/mt) to INR 49,700/mt ($589/mt) ex-Mumbai and are up INR 1,500/mt ($18/mt) to INR 51,500/mt ($610/mt) ex-Chennai in the south.
They said that the gains seen over the past week could be partly attributed to business activity improving after the holidays and more market intermediaries starting to restock. At the same time, the market participants are banking on indications available from government statements and expectations of protective measures on imports from China and Vietnam, which could be officially announced soon.
“This will seriously limit the upside potential of local trade HRC prices unless the government swiftly imposes tariff restrictions,” an analyst at a Mumbai-based financial advisory firm said.
However, a section of producers maintained that the increase in base prices was effected to cover the rise in input costs, particularly iron ore, and did not improve net margins of mills. “We are just able to compensate for input cost increases. Current prices are not good enough for better net realisations, and these price levels continue to jeopardise our current capital expenditure plans,” a source at Tata Steel Limited told SteelOrbis.
“Demand is inching up. But, unfortunately, much of the incremental demand is being met by imports. It is imperative for the government to check imports, offer a level playing field to local mills, and resulting strong domestic prices, to ensure the health of the domestic steel industry,” he added.
$1 = INR 84.37