Over the past week, prices in the local Indian hot rolled coil (HRC) market have remained stable at INR 42,000/mt ($603/mt) ex-works amid indications that domestic steel mills will keep base price unchanged for current month deliveries, although trading activity has remained low key, traders said on Monday, January 7.
Market sources said that state-run,Steel Authority of India Limited (SAIL) has decided to keep base HRC prices unchanged for the current month and most other large domestic steel mills are expected to follow suit.
“The market is disappointed that large domestic steel mills are not adjusting base prices despite rising inventories across market participants and the slowdown in trading activity,” a Mumbai-based trader said. “With the steady fall in demand from end-users, dealers are not willing to make fresh bookings at what are considered high current prices, resulting in a sharp fall in market activity,” the trader added.
Sources said that market sentiment could turn more bearish as there is speculation that the government will not be able to push ahead with increasing import duty on flat steel products in the forthcoming national budget to be placed before parliament on February 01.
The sources said that, with national elections slated within the next few months, the government will place a vote-on-account instead of a full-fledged budget for 2019-20, and this might not entail any changes in tariffs.
$1 = INR 69.68