Local Indian hot rolled coil (HRC) market has reversed their recent downtrend, with trade prices showing gains over the past week, riding on the back of base price hikes announced by a few large mills and declines in import competition, SteelOrbis learned from trade and industry circles on Monday, May 11.
Sources said that, reacting to increased base prices of mills, trade-level HRC prices have gained INR 900/mt ($10/mt) to INR 57,100/mt ($604/mt) ex-Mumbai and are up INR 1,000/mt ($11/mt) to INR 58,900/mt ($623/mt) ex-Chennai in the south.
According to the sources, the immediate negative impact of the rises in base prices has been reflected in a sharp fall in trade volumes. It is pointed out that, while trade channels have mostly paused fresh bookings, large industrial consumers have been resorting to need-based purchases.
However, according to industry analysts, the steadily depreciation of the Indian rupee against the US dollar and rising logistical and handling costs have made the landed prices of imported HRC around INR 7,000/mt ($74/mt) higher than domestic prices, which could offer some support to the market.
“The market is very cost-driven and demand is seeing steady declines. There are no positive drivers. The government is giving out definitive signals that the economy is struggling, and austerity measures are being put in place. This is a very big hit to sentiments,” a Mumbai-based distributor told SteelOrbis.
“With macroeconomic indicators starting to take hits from the Middle East driven-crisis, the market is entering very negative territory. Against this backdrop, the gains seen in steel prices are illusory and do not reflect the underlying weakness,” he added.
$1= INR 94.41
