Local Indian hot rolled coil (HRC) trade prices have continued to harden over the past week amid declining import competition, the tightening of supplies, and imminent base price hikes by mills even as trade volumes have remained low to moderate amid the cautious mood of buyers, SteelOrbis learned from trade and industry circles on Monday, April 6.
Sources said that HRC trade prices have gained INR 1,000/mt ($11/mt) to INR 57,000/mt ($613/mt) ex-Mumbai and are up INR 1,200/mt ($13/mt) to INR 59,900/mt ($645/mt) ex-Chennai in the south.
The sources said that the market is expecting a sharp base price increase in early April across the flat product segment, taking a cue from integrated mills announcing an increase of around INR 2,000/mt ($22/mt) in prices of long products late last week.
There are several fundamental dynamics that are pushing up steel prices such as the shortage of energy especially liquefied natural gas (LNG), imported raw material supply disruptions, and declining imports amid logistical costs and challenges due to the war in the Middle East, the sources added.
“We see an immediate short-term price target of INR 61,000/mt ($656/mt). Price increases over the past two months have been absorbed by the market but a market correction is a distinct risk going forward,” a Mumbai-based distributor told SteelOrbis.
“Rising costs of energy will exert all-round inflationary pressure. This will trigger a demand depression across industrial segments. Already we see a more cautious market mood. Although there is some need-based buying, sustained price rises can see negative growth across industrials and lower raw material demand,” he added.
$1 = INR 92.67