After a brief pause, prices in the local Indian hot rolled coil (HRC) market have resumed their upward trend during the past week, increasing by INR 500/mt week on week to INR 43,000/mt ($615/mt) ex-works, in anticipation of a base price hike by domestic steel mills over the course of the next few days, traders said on Monday, March 11.
Market sources said that at least two steel mills have increased base prices by INR 500/mt for all flat products and other mills are expected to start announcing new base prices for current month delivery over the next few days.
“The hike in March base prices once fully effected will be the fourth base price revision by domestic steel mills since February,” a Mumbai-based trader said.
“With local steel mills pushing base prices upwards to increase margins as the current fiscal year draws to a close, the lack of any demand-side support is resulting in a steady fall in trades and volumes in the market,” the trader added.
According to a steel sector analyst with a Mumbai-based financial services advisory firm, domestic steel mills have been banking on the steady hardening of international steel prices to ensure lower import competition and offset the impact of the appreciating rupee on the landed price of imported HRC.
At the same time, with the Indian national election announced to start from April 11, 2019, the impact of political uncertainty on sentiments could prompt commercial importers to be cautious about concluding large import contracts, providing indirect support for local prices, the analyst added.
$1 = INR 69.89