Local Indian hot rolled coil (HRC) prices have remained under pressure losing a marginal INR 100/mt ($1.4/mt) during the past week to INR 34,750/mt ($491/mt) ex-works, amid negligible trading activity owing to the festival holidays and market expectations of a delayed announcement of base prices for the current month by domestic steel mills, traders said on Monday, October 7.
“No buyers have been active either among traders nor end-users owing to the festival holidays and bank holidays that will extend over this week too. Also, most domestic steel mills will delay announcing their base pricing strategy for current month deliveries owing to these festival holidays,” a Mumbai-based trader said.
“There are differing views on steel mills’ base prices for the current month. I think that the most likely possibility will be local steel mills maintaining base prices for the current month. Despite the market slowdown and large inventories, domestic producers have little leeway in cutting base prices in view of rising input costs and hence the disinterest among buyers in making any bookings in a rush,” he added. Nevertheless, some market participants believe that a further sharp drop of base prices is inevitable in October at least.
Market sources said that buyers are also keeping a close watch on India’s negotiations in the Regional Comprehensive Economic Pact (RCEP) which is at a critical stage and could open up duty free steel imports from China, and several market intermediaries have preferred to wait and watch the outcome rather than make any fresh bookings.
$1 = INR 70.79
