The local Indian hot rolled coil (HRC) market staged a modest recovery during the past week with prices edging up INR 250/mt ($3.5/mt) to INR 34,250/mt ($482/mt) ex-works amid a slight improvement in trading sentiments and mild restocking by market intermediaries, SteelOrbis has learned.
According to traders, though bookings by end-users continued to remain sluggish, the modest increase in price was owing to small-volume bookings by traders to replenish their stocks. More significantly, the traders said that most large steel mills had pulled back discounts that were being offers to push volumes into the market in previous weeks.
A section of market intermediaries said that sentiments showed signs of improvement after the government announced last week that it would be taking measures to boost demand in sectors which were showing signs of weakness and were not covered by measures already taken by the government; however, whether better sentiments would be translated into higher trading volumes and prices would largely depend on whether such measures included a fiscal stimulus for manufacturing growth.
“It is still too early to forecast a reversal of the sustained falling trend in the market from a 36-month low in HRC prices, as the gains during the past week came amid a very low trading volume,” a Mumbai-based trader said.
“End-users are still staying away from making significant volume bookings to increase their inventories and finished product sales are still sluggish. The price increase has to be sustained for at least a full quarter before we can say that the market is getting stabilized at higher levels,” he added.
$1= INR 71.10
