Local Indian hot rolled coil (HRC) prices have remained stable during the past week at around INR 33,000/mt ($519/mt) ex-works as import shipments have eased, traders said on Monday, June 22.
According to a Mumbai-based trader, negligible import transactions have been reported during the week in the wake of the Indian government last week announcing a hike in import duty on flat products to 10 percent from 7.5 percent earlier.
The trader said that, in view of the higher duty, local steel mills are also likely to rule out any price adjustments next month, and this has provided support for local prices.
Due to the higher import duty combined with the Indian rupee consolidating at levels weaker than INR 64 to a dollar, import shipments have become expensive, resulting in far few transactions reported during the past week, the trader said.
However, market sources said that, with imports becoming expensive and local mills expected to keep their base HRC price unchanged, dealers have sharply reduced fresh bookings as demand has continued to be sluggish and this has resulted in trading conditions being very dull in a low volume market.
Sources said that local HRC prices have slumped by INR 2,500/mt ($39/mt) over the past three months and the import duty hike has provided support and relief to the market.
Nevertheless, whether price consolidation alone would bolster demand is a question dogging the markets and several importers are awaiting a response from HRC exporters in China and Southeast Asia and to see how they will adjust offers in reaction to higher duties, the sources added.
$1 = INR 63.56