Local Indian hot rolled coil (HRC) prices have continued to perform strongly for the eighth consecutive week and have hit a one-year high after gaining INR 500/mt ($7/mt) week on week to INR 41,800-42,300/mt ($559-566/mt) ex-works, reacting to reports of a further fall of mill-end inventories and expected September base price hikes, SteelOrbis has learned on Monday, August 24.
According to a number of market reports, local prices have continued to surge based on indications of a further drawdown in August inventories by at least 2-3 million mt from July levels.
Traders said that the market expects domestic steel mills to increase base prices by a range of INR 500-1,000/mt ($7-14/mt) during the first weeks of September, riding on lower inventories and rising demand, particularly in northern and eastern regional markets which have been showing a faster recovery from the impact of the pandemic.
“A combination of global finished steel price rises and a supply correction has happened in the overall steel market system, and pent-up demand post-national lockdown, with several user segments trying to make up lost demand from previous months, is supporting the local price increase,” Jayant Acharya, marketing director of JSW Steel, said.
At least two traders said that they have received indications from steel producers that the latter will keep attempting to push up base HRC prices to offset rising costs of iron ore in the domestic market, apart from leveraging the improvement in demand among key user industries.
Steel producers have said that prices of commercial purchases of iron ore have increased by INR 700/mt ($9/mt) over the past one month, and the current rise in demand has provided conducive market conditions to pass on higher input costs to customers of finished products.
$1 = INR 74.76
