Local Indian hot rolled coil (HRC) prices have continued to surge ahead for the second consecutive week, gaining INR 1,250/mt ($18/mt) week on week to around INR 32,750/mt ($477/mt) ex-works on the back of the sharp rise in speculative bookings by dealers, traders said on Monday, February 22.
"The sharp rise in HRC prices in the market for the second straight week has lost correlation with fundamentals. There are a lot of speculative bookings by market participants," said a Mumbai-based trader.
"With no import transactions over the past month and local steel mills keeping prices stable, the market is characterized by speculative bookings hoping for profits," the trader said.
However, other market players point out that global HRC prices are showing signs of stabilizing and, with imports drying up completely, local steel mills have another window to hike local HRC prices, which would trigger a surge in prices in the spot markets.
At least two market sources have said that indications available from local steel mills point towards the latter announcing HRC base price hikes of at least INR 1,000/mt ($14/mt) before they close books for the current fiscal year which ends on March 31.
$1 = INR 68.60