Local Indian hot rolled coil (HRC) prices have remained stable during the past week at INR 35,500/mt ($533/mt) ex-works, amid sustained buying with the market anticipating steel mills to go in for another round of price hikes before the end of the current month, traders said on Monday, May 16.
“After price hike by local steel mills early in the month, HRC prices have been consolidating at higher levels with fresh bookings by dealers continuing to be observed,” a Mumbai-based trader said.
“The market is rife with reports of steel mills going in for another INR 500/mt ($7.5/mt) hike in HRC prices, prompting several dealers to restock,” the trader added. However, some market sources have cautioned that there are doubts regarding the higher price levels being sustained as the impact of the slowdown in factory output will only have an impact on flat product prices after a delay.
The sources pointed out the index of industrial production (IIP) figures released by the Indian government last week indicated a slowdown in factory output growth to 0.1 percent in March 2016. The sources said that the trend in the manufacturing industries is a risk to the sustainability of current HRC prices and a slowdown in volumes during the current week could also prevent steel mills from announcing a second price increase within a single month.