Local India hot rolled coil prices recorded gains, consolidating at higher levels, riding on expectations of base price hikes by mills for April deliveries. However, trade volumes fell with buyers showing resistance to the high prices by lowering booking volumes and year-end considerations, SteelOrbis learned from trade and industry circles on Monday, March 31.
Sources said that HRC trade price was up INR 750/mt ($9/mt) at INR 52,000/mt ($605/mt) ex-Mumbai and gained INR 800/mt ($9/mt) at INR 52,800/mt ($614/mt) ex-Chennai in the south.
There have been rumors that some bookings were confirmed by large distributors at higher prices of INR 55,000/mt ($640/mt) for large volumes and buyers seeking immediate deliveries.
Sources said that such premiums were being charged owing to several reasons: large distributors having very low stocks, having liquidated inventories ahead of the closing of books for the fiscal year, some tightening of supplies from some large mills under maintenance shutdowns, and trade channels holding back volumes awaiting an imminent rise in prices.
Information trickling in from large mills hints that a base price hike ranging INR 1,000-1,5000/mt ($12-17/mt) was being considered for April delivery. However, there is uncertainty of how soon the price revision should be announced, with some producers favoring delaying it for some weeks and time it till after the government implements the commerce ministry recommendation for a 12 percent safeguard duty on flat steel imports.
It is argued that with the safeguard duty in place, buyers’ resistance and negative sentiments on a higher base price would be contained.
$1=INR 85.90