The local Indian hot rolled coil (HRC) market has resume its uptrend after a short period of stability, with prices surging by INR 1,000/mt during the past week to INR 46,500/mt ($695/mt) ex-works, with major steel mills announcing a hike in their base prices and amid expectations of higher overseas shipments, traders said on Monday, May 7.
Sources said that Indian steel mills through early meetings of their pricing committees have been quick in announcing HRC base prices increases averaging at INR 1,000/mt for current month deliveries.
The sources said that the large mills are planning to aggressively price HRC exports to Southeast Asian markets, enabled by the depreciation of the Indian rupee in the direction of the INR 70 to a dollar mark and this will tighten supplies in the Indian market further and provide support for HRC prices to consolidate at higher levels.
“There is a lot of talk in the market of HRC prices touching the INR 50,000/mt ($748/mt) mark and this is not far-fetched in the medium term with steel mills enjoying a lot of pricing power, even without a significant demand improvement,” a Mumbai-based trader said.
“One of the fall-outs of steel mills’ pricing power and the surge in HRC prices is that market intermediaries are lowering their booking volumes and are cautious about building up their inventories excessively,” the trader added.
Sources said that there have been reports of some traders concluding transactions for ex-Japan HRC during the past week with the overall volume estimated at around 20,000-30,000 mt, but this did not have any impact on domestic prices.
$1 = INR 67.19