Local Indian hot rolled coil (HRC) prices have remained stable during the past week at INR 34,750/mt ($485/mt) ex-work amid market expectations of a base price hike by domestic steel mills next month and of a demand revival next quarter, SteelOrbis has learned on Monday, November 25.
Most local steel mills are foreseen to go ahead with a base price hike in December for the second straight month, expecting prices to have bottomed out for the medium term and a firming up of global prices at the same time.
“Large sections of the market, producers and market intermediaries feel that prices having bottomed out can only move one way, which is up from current levels. I am expecting steel mills to increase base HRC prices by INR 500-700/mt ($7-10/mt) for December delivery,” a Mumbai-based trader said.
“Most large steel mills have been able to reduce inventories in the range of 20-30 percent through an aggressive export thrust since April 2019, which would enable producers to increase prices and improve margins at a time when raw materials prices have not come down as fast as expected earlier,” the trader added.
According to the CEO of an eastern India-based steel mill, the market has absorbed the higher base price of HRC and buyers are concluding fresh bookings at higher levels and this is expected to spread across other product categories too.
He said that steel mills have completed destocking and analyzing pricing trends over the past weeks and are expected to increase base prices next month.
$1 = INR 71.70