Local Indian hot rolled coil (HRC) prices have recorded marginal gains in a delayed reaction to base price increases by mills, but have remained at a discount to the latter with trade channels keeping fresh bookings at nominal volumes amid falling end-user demand, SteelOrbis learned from trade and industry circles on Monday, April 10.
Indian HRC trade prices are up just INR 300/mt ($4/mt) to INR 60,200/mt ($732/mt) ex-Mumbai and are marginally up INR 100/mt ($1.2/mt) to INR 58,900/mt ($717/mt) ex-Chennai in the south.
“The market is into uncertain conditions and lacks a direction. Domestic prices are too high in the weak industrial demand situation,” a steel sector analyst with a Mumbai-based financial advisory firm said.
“Mills have been pushing up local prices based on strong exports. But this situation is now showing signs of changing. Demand in the EU, so far the most important destination for sellers, is showing signs of easing and Gulf buyers are seeking cheaper alternatives. With possibilities of high export allocations of mills for the current quarter getting diverted to local sales, domestic prices risk facing new pressures,” he said.
According to an official at a private mill, producers are assessing both domestic and overseas market conditions and, if necessary, may defer the much-expected second base price increase for the current month.
He said that, while input costs have been increasing, making a strong case for producers to continue pushing up prices, “the interest of consumers will be given adequate weightage” while taking any decision on new prices.
Sources at at least two private mills acknowledged that a base price increase of around INR 1,000/mt ($12/mt) “was on the table” but a final decision would be based on how exports are sustained over the next two to three weeks.
$1 = INR 82.20