Over the past week, prices in the local Indian hot rolled coil (HRC) prices have remained unchanged at INR 43,000/mt ($627/mt) ex-works, while the market has been trying to absorb recent base price hikes by domestic steel mills amid negative sentiment over poor manufacturing sector growth, traders said on Monday, March 18.
“The market is still reacting to recent base price increases by local steel mills by dealers slowing fresh bookings. Although a correction has not yet set in, sentiment has become very negative,” a Mumbai-based trader said.
“The reports over poor manufacturing sector growth from the government coupled with political uncertainties linked to the Indian national elections next month are prompting market intermediaries to stay away from large transactions,” the trader added.
Government data released last week showed manufacturing growth during January 2019 at 1.7 percent, down from 7.5 percent during the corresponding month of the previous year.
According to market sources, amid the combination of low import competition, the pricing power of local mills and weak demand at the same time, local HRC prices have been expected to move within a narrow range for the next few weeks, with only a definite trend likely to emerge in the next fiscal year starting next month, even though uncertainties due to election will continue to weight on trading activity.
$1 = INR 68.54