Local Indian hot rolled coil (HRC) trade prices have edged up over the past week amid slightly more cautious restocking by industrial users and distributors, owing to the headwinds of high prices and liquidity challenges, SteelOrbis learned from trade and industry circles on Monday, January 19.
Sources said that HRC trade prices are up INR 500/mt ($6/mt) to INR 49,500/mt ($545/mt) ex-Mumbai and have gained INR 200/mt ($2/mt) to INR 51,600/mt ($568/mt) ex-Chennai in the south.
According to sources, while the market has witnessed some buying activity, both industrial consumers and market intermediaries have slowed down volume bookings. Most remain cautious about restocking high-priced raw materials, as they are uncertain about passing on higher costs through price hikes of finished products amid a neutral-to-negative outlook for macroeconomic indicators.
At the same time, trade channels are facing liquidity challenges as the fiscal year-end approaches and several in trade circles have exhausted working capital limits from banks, the sources added.
“The market expects mills to continue to hike base prices after the three rounds seen over the past few weeks. But the rush by users to beat the next price hike by restocking has not been seen over the past few days. The market is tiring of the excessive price increase by producers as the market has reached the limit of absorbing it. A correction from stronger buyer resistance cannot be ruled out,” a Mumbai-based distributor told SteelOrbis.
“The market can go in either direction after the extended weekend holiday ahead. It is better to wait and watch the next pricing trend before committing to bookings,” he added.
$1 = INR 90.54