Local Indian hot rolled coil (HRC) prices have remained stable during the past week even though trading activity took a pause for the festival holidays, but the outlook continues to be positive, sources told SteelOrbis on Monday, October 26.
According to traders and producing integrated steel mills, both base prices and traded prices held strong despite negligible bookings received owing to the spate of holidays.
But downside risks from current levels are minimal considering tight inventories at integrated steel mills, optimal capacity utilizations of plants, and the distinct possibility of producers increasing base prices for November deliveries responding to rising input costs like those of raw materials in the case of mills without captive mines.
Local HRC base prices have been maintained at INR 44,000-44,500/mt ($599-605/mt) ex-works. Tradable prices have also remained stable, in the range of INR 43,000-43,500/mt ($585-592/mt) ex-stockyard across regional markets such as the western and eastern states.
However, HRC prices have remained at high levels in northern markets around Ludhiana at INR 44,500/mt ($605/mt) ex-stockyard amid reports of a localized shortage of material available in the market.
“Market activity is expected to remain muted for the festivals lasting until around November 11. But prices are unlikely to react to this. Both producers and market intermediaries are benefitting from a strong demand rebound. Producers are most likely to increase base prices in view of tight supplies and rising input costs, and hence even a downside correction can only be very limited and short-lived,” an official from Steel Authority of India Limited said.
$1 = INR 73.50
