Local Indian hot rolled coil (HRC) prices have remained stable during the past week at INR 38,200/mt ($499/mt) ex-works, with negligible trading activity amid uncertainties over how the national lockdown will be eased next week, SteelOrbis has learned on Monday, April 27.
According to traders, though indications available suggest that the national lockdown will end on May 3, it would not be uniform across the country and the resumption of ‘economic and social activities’ would be graded as per ‘risk zones’ and not uniform across the country.
Under the circumstances, the market is apprehensive that, with differing levels of economic and manufacturing activities permitted in different parts of the country, the various links in the supply chain for raw materials and inputs for steel mills at one end and distribution, marketing and sales at the other will not be seamless, and that the normalizations of operations of steel mills and consumption centers will have weak links, prompting market participants at each stage to remain cautious and not conclude transactions for the time being.
At least two officials at private steel companies said that, while most domestic steel mills have kept base HRC prices unchanged during the current month, no decision on a revision of May base prices will be taken in a hurry unless producers are able to assess the impact of the phasing out of the lockdown.
Elaborating on the unchanged local HRC prices, the officials said that most local steel producers have been very focused on maintaining shipments overseas to check inventories and that the sustained level of exports has enabled producers to also avoid too heavy discounting in local sales.
However, the situation both in the local market as well as in key overseas markets is still ‘very fluid’ and May pricing strategies could ‘go in either direction’, the officials added.
$1 = INR 76.50
