Local Indian hot rolled coil (CRC) have firmed up in reaction to large mills increasing base prices late last week but trade activity has remained muted due to festival holidays and little change in the demand profile which has kept buyers in a cautious mood, SteelOrbis learned from trade and industry circles on Monday, March 9.
Sources said that HRC trade-level prices are up INR 600/mt ($7/mt) to INR 52,600/mt ($573/mt) ex-Mumbai and have gained INR 1,000/mt ($11/mt) to INR 55,500/mt ($604/mt) ex-Chennai in the south.
The sources said that the full impact of higher base prices would become clearer over the next few days as business activity picks up after the holidays last week.
While the mood has remained cautious, a section of market participants have maintained that low trade volumes will persist and that a deeper correction cannot be ruled out as mills have increased prices citing cost increases but without much support from the demand side.
“The war in the Middle East can lead to a significant cost push in steel production owing to higher energy costs. Overall rising freight costs will also lead to the higher landed price of imported raw materials like coking coal. Under these circumstances, local mills will keep attempting to push up finished steel prices despite any resistance in the market,” a Mumbai-based distributor told SteelOrbis.
“The coming weeks will show whether steel customers be willing to absorb higher prices or the market will see a strong demand contraction,” he added.
$1 = INR 91.84
