In the past week, local Indian hot rolled coil (HRC) prices have consolidated at higher levels for the third consecutive week, gaining INR 200/mt ($3/mt) to around INR 32,700/mt ($500/mt) amid a sharp fall in import shipments and local mills deciding to keep their base prices unchanged for the medium term, traders said on Monday, September 21.
According to a Mumbai-based trader, the 20 percent safeguard duty imposed earlier in the month has prompted local mills to keep their base prices unchanged for at least the next two months.
In the medium term, local HRC prices are unlikely to fall below current levels, which has caused local traders to increase their booking activity, thereby providing support for prices, the trader said.
Local steel mills, emboldened by the government’s import protection measures, have decided to maintain their prices unchanged, refusing to pass on the benefits of lower raw material prices to HRC customers, stating that domestically-sourced raw materials are still priced higher than landed imported prices, the trader added.
Market sources said that import transaction volumes have shrunk to a new low as most traders have been reluctant to conclude import deals.
The sources said that the import market, though marked by insignificant volumes at present, is delicately poised and can go in either direction depending on HRC import offers.
The market sources said that current ex-China HRC offers are just about holding at around the $300-310/mt CFR Mumbai mark, while some market players expect interest in imports to revive once offers edge below $300/mt.
A large number of engineering product manufacturing sectors are waiting for Chinese exporters to adjust their offers in line with the safeguard duty and, with the rupee gaining strength to around INR 65.45 to the US dollar, the weak activity for HRC import shipments is likely to be short-lived, a section of market sources said.