Local Indian hot rolled coil (HRC) base and tradable prices have been maintained at high levels during the past week despite low trading activities, sources told SteelOrbis on Monday, November 16.
The sources said that low trading activity owing to festival holidays and the symbolic closing of books by small and medium trade firms did not impact prices as the outlook remained strong in anticipation of the tightness of supplies being expected to continue and strong signals in the market that producers will continue to hike base prices through December.
Local HRC base prices have remained unchanged at INR 45,000-45,500/mt ($603-610/mt) ex-works. The tradable price in the eastern regional market has also remained steady in the range of INR 43,000-43,500/mt ($576-583/mt) ex-warehouse, while thin trades have been reported from western markets at INR 44,000-44,500/mt ($590-597/mt), close to levels in earlier weeks, market sources said.
“The fall in market activity is very temporary and fresh bookings are expected to emerge over this week as not only demand in end-use industries is reviving faster than anticipated. Producers will also take advantage of tight supplies in the market to sustain a base price increase through the rest of the months of the current fiscal year,” a steel sector analyst with a Mumbai-based financial services firm said.
“But granular market data suggest that the revival in the steel market is very uneven. Price and demand gains are being seen only in flat product market segments. So at the corporate level, margin improvements will largely be determined by the product portfolio of producing companies as long products are still moving slowly,” he added.
At least two market intermediaries and an official at a government-run steel mill said that producers are looking at increasing base prices by at least another INR 1,000/mt ($13/mt) for December deliveries and this sentiment will trigger sustained buying over the next couple of weeks.
$1 = INR 74.60
