Local Indian hot rolled coil (HRC) prices have continued to consolidate at higher levels in reaction to two consecutive base price hikes by mills over the past week and robust restocking by industrial users expecting further base price increases by producers taking advantage of fresh import barriers, SteelOrbis learned from trade and industry circles on Monday, January5.
Sources said that trade-level HRC prices have gained INR 1,200/mt ($13/mt) to INR 48,700/mt ($541/mt) ex-Mumbai and are up INR 500/mt ($6/mt) to INR 50,400/mt ($560/mt) ex-Chennai in the south.
The sources said that, while antidumping duties on imports from certain countries offers protection from import competition, the levy offers more headroom for mills to consider further base price increases in January, triggering rapid restocking by industrial users. Distributors are also reported to have achieved signification liquidation of stocks over the past fortnight and fresh bookings by them will sustain the bullish mood in the market.
“With import prices rising on a combination of antidumping duty and depreciation of the Indian rupee, local mills have regained pricing power. This is crucial for producers to increase finished steel prices to offset rising prices of imported raw materials. Robust buying by user segments is in favour of the mills,” a Mumbai-based distributor said.
“The replacement of short-term safeguard duty with a three-year phased duty structure has removed uncertainties on import protection. Industry likes certainty and stable structures. It will help mills to plan their production. The market seems to be absorbing the price increases as demand for key industries is improving,” he added.
$1 = INR 90.04