Local Indian hot rolled coil (HRC) prices have remained unchanged during the past week at around INR 36,000/mt ($583/mt) ex-works, except in northern India where prices have been corrected by INR 400/mt ($6/mt) in reaction to reports of excessive stocks in the region, traders said on Monday, February 2.
According to a Mumbai-based trader, the market has taken a pause and transaction volumes are at low levels, as buyers are awaiting for pricing strategy indications for the current month from local steel mills. Pressures from import competition is seen to be rising and dealers and buyers have preferred to delay all fresh transactions, waiting to see whether local steel mills will adjust domestic prices or go for more drastic action like reducing plant capacity utilization rates to try to balance the supply side, as indicated by several steel companies, the trader said.
Market sources said that offers for ex-China HRC have moved down for the second consecutive week by around $10/mt and are currently available in the range of $430-440/mt CFR Mumbai.
However, most buyers are delaying import transactions to avoid getting caught on the wrong foot with reports indicating that the Indian government is considering an increase in import duty later this month to 10 percent from the current rate of 7.5 percent, the sources said.
The sources also said that, while prices have been able to remain stable in major markets in the west and south of the country, HRC prices in northern markets around New Delhi have undergone a correction since dealers in the region are saddled with high inventories, mostly due to ex-China HRC shipments delivered during January.
$1 = INR 61.80