The local Indian hot rolled coil (HRC) market has lapsed into a tentative correction phase with trade level prices losing ground amid a fall in activity and a reaction to three successive base price increase by mills in less than a month, SteelOrbis learned from trade and industry circles on Monday, February 13.
Indian HRC trade prices have lost INR 1,100/mt ($13/mt) to INR 59,800/mt ($725/mt) ex-Mumbai and are down INR 1,000/mt ($12/mt) to INR 58,500/mt ($709/mt) ex-Chennai in the south.
“Some fatigue is setting into the market after frequent increases in base prices by mills without a commensurate uptick in demand. Trade channels too are fully stocked after rapid bookings over the past weeks and buyers are unwilling to sustain bookings at current high prices,” a Mumbai-based distributor said.
“Market participants are unsure how deep the first signs of correction will go. We expect a certain volatility in the market to continue as buyers will resist higher prices and producers continue to drive up base price,” he said.
An official at a private mill did not rule out a further increase in base prices at the end of this month or in early March. “We are continuously assessing the market conditions. Our pricing committee will meet shortly to decide on how we can maximize per mt margins taking along our customers’ interest,” a source said.
“Global markets are also getting volatile and this will also impact our domestic pricing,” he said, hinting that export sales which have been buoyant so far might be easing somewhat and could have a higher supply-side impact on local prices.
$1 = INR 82.50
