Local Indian hot rolled coil (HRC) prices have moved down by INR 500/mt during the past week to INR 44,500/mt ($692/mt) ex-works, amid higher volume offerings by steel mills and buyers’ reluctance to book large volumes at higher price levels, traders said on Monday, February 12.
“With most local steel mills completing their revisions of HRC base prices early in the month, these mills have started to push higher volumes in the local markets and reducing their focus on exports, resulting in supply-side pressures on prices,” a Mumbai-based trader said.
“At the same time, dealers are now extremely cautious about booking large volumes and building up high-price inventories,” the trader added.
However, at least two other traders said that the downward price correction could be a temporary blip and predicted a recovery in the short term, on the combination of sustained import protection from the government and the possibility of another base price hike later this month or in early March by Indian steel mills citing the steady rise in input costs.
The two traders said that, after increasing base prices by around INR 1,500/mt, the market expects Indian steel mills to raise HRC base prices further by about INR 1,000/mt within the next few weeks to bolster margins before the close of the current fiscal year on March 31.
$1 = INR 64.33