Prices in the local Indian hot rolled coil (HRC) market have continued their downtrend for the fourth consecutive week, decreasing by INR 500/mt week on week to INR 40,500/mt ($565/mt) ex-works, amid a sharp fall in trading activity with buyers making an exit from the market amid reports that domestic steel mills are likely to increase price for current-month deliveries, traders said on Monday, February 4.
“Sentiments in the market have been badly affected by reports trickling in that local steel mills will start announcing a hike in base HRC prices during the current week. This is extremely negative as the market has already been impacted by high inventories at both steel mills and market intermediaries,“ a Mumbai-based trader said.
“I am not sure how the strategy of steel mills to increase sales margins by increasing HRC prices as the current fiscal year draws to a close will work out. The market is already in a very high oversupply position, import competition is increasing, and hence higher base prices will only continue to drive buyers of local HRC away,” the trader added.
According to market sources, most large steel mills are considering increasing base HRC prices by INR 500/mt and will start to make official announcements later this week.
$1 = INR 71.72