Local Indian hot rolled coil (HRC) trade prices have continued to consolidate at higher levels over the past week, but the pace of the uptrend has eased amid a dip in trading activity. However, any major correction has been mostly ruled out as supplies from mill to market have remained on the tighter side.
Trade-level HRC prices are up INR 400/mt ($4/mt) to INR 52,000/mt ($574/mt) ex-Mumbai and have gained INR 700/mt ($8/mt) to INR 54,700/mt ($604/mt) ex-Chennai in the south. However, most sources in trade circles have reported a decline in bookings and volumes over the past week, with large industrial users heard to be taking a pause from restocking at the current higher prices.
At the same time, despite the fall in trade activity, market participants have maintained an optimistic outlook and have discounted an immediate correction setting in. They have pointed out that in some regions like in the north, dealers have still been seeking premiums of INR 1,000/mt ($11/mt) for immediate deliveries, indicating that tight supplies from mills to dealers persist and will continue to offer supply-side support to current prices.
“There are regional demand variations. Intermittent pauses in restocking by large industrials are normal as buyers are always cautious in committing to bookings at higher prices. But we do not see any deep correction setting into the market,” a Mumbai-based distributor told SteelOrbis.
“A section of the market is expecting another round of base price increases by mills in the current month. This could be around INR 1,000/mt ($11/mt) as producers will try leveraging lower volume availability across the supply chain,” he added.
$1 = INR 90.54
