Local Indian hot rolled coil (HRC) prices have consolidated at higher levels as domestic producers completed base price increases during the past week, but regional disparities have emerged, indicating that sellers have been competing to keep pushing higher sales volumes in order to maintain a balance as mills neared maximum capacity utilizations levels.
Market sources said that local HRC prices are highest in western regional markets around Mumbai at INR 42,500-43,000/mt ($581-588/mt) ex-works, while the lowest price prevails in eastern regional markets at around INR 41,000-41,500/mt ($561-567/mt) ex-works.
“A very heterogeneous demand profile is seen across markets. This is largely owing to end-use manufacturing units operating at different levels in view of very different pandemic controlling measures in different states and even different within states. Hence, sellers are adopting varied pricing strategies in keeping with the varied demand profile to keep pushing volumes in the market,” an official at a steel mill told SteelOrbis. “The increase in base price has been lower than market expectations of INR 3,000/mt ($41/mt). The increase has been in the range of INR 1,500-2,000/mt ($21-27/mt). However, considering the different demand profile across regional markets, base prices have lost some of their relevance as prices are differing widely depending on locations of buyers and sellers,” he added.
However, at least two traders and an official at one of the mills said that demand continues to be on an uptrend and prices will consolidate and settle at higher levels over the current month, as manufacturing activities continue to normalize across regions.
High exports will also enable domestic producers to sustain their plant capacity utilizations levels, which have been averaging above 90 percent for most steel mills.
$1 = INR 73.14
