Local Indian hot rolled coil (HRC) prices have increased again, gaining INR 500/mt ($7.60/mt) over the past week to around INR 33,500/mt ($515/mt) ex-works, as large domestic producers have announced higher base prices for the current month, traders said on Monday, October 5.
According to market sources, Steel Authority of India Limited (SAIL) has announced an increase of INR 700/mt ($10.70/mt) in base prices for all flat products. Other producers like JSW Steel Limited and Tata Steel have increased their flat product prices by INR 300-500/mt ($4.60-7.60/mt), the sources said.
"The market had been strongly expecting local mills to adjust prices for the current month taking advantage of the 20 percent safeguard levy on imports," a Mumbai-based trader said.
"Steel mills have also claimed that part of the increase was to offset the increase in railway freight charges averaging INR 100/mt ($1.50/mt) effective from the current month," the trader added.
A section of traders said that most market participants have been passing the price increase on their customers and no discounts have been heard due to sluggish demand and the erosion of margins at the dealers' end.
Sources said that most dealers have been cautious about making fresh bookings, not sure whether higher HRC prices will be sustained since they have increased for the fifth consecutive week, while the level of buyers' resistance will depend on trends in imports over the medium term.
Over the past week, ex-China HRC offers have remained below the $300/mt mark at around $295/mt CFR Mumbai for November shipment, but only negligible transactions have been reported in the market with importers awaiting a further drop in offers over the next few weeks, the sources said.