Local Indian hot rolled coil (HRC) trade prices have been maintained on a sharp uptrend over the past week, riding on the back of base price increases effected by large mills, tighter supplies from producers, and a drawdown of stocks across distribution channels, SteelOrbis learned from trade and industry circles on Monday, February 9.
Sources said that HRC trade prices are up INR 1,000/mt ($11/mt) to INR 51,600/mt ($564/mt) ex-Mumbai and have gained INR 800/mt ($9/mt) to INR 54,000/mt ($596/mt) ex-Chennai in the south.
At least two large distributors have confirmed that some trade channels in the west have been seeking premiums ranging at INR 1,000-1,200/mt ($11-13/mt) from buyers seeking immediate deliveries, indicating lower-than-normal inventories available in trade circles in the region.
However, a steel sector analyst with a Mumbai-based financial advisory firm pointed out that the recent rally in prices seen across categories has been the result of policy support like safeguard duty, tighter availability and the improvement in overseas shipments rather than based on an incremental demand improvement from user sectors.
He said that mills, availing of these factors, have been resorting to aggressive repeated hikes in base prices. While supply-side dynamics are favoring price movement, without any significant positive from the demand side the market risks facing a correction in the medium term.
$1 = INR 90.43