Over the past week, prices in the local Indian hot rolled coil (HRC) market have remained stable for the second consecutive week at INR 41,500/mt ($597/mt) ex-works amid negligible trading activity with market participants largely staying away from the market ahead of the counting of votes in the just-concluded national elections, traders said on Monday, May 20.
“With the national elections over and the counting of votes slated for Thursday, no market participants - dealers or end-users - have been willing to conclude any deals,” a Mumbai-based trader said.
“In view of the slowdown in industrial growth, any revival in the short term will depend on whether the new government to be formed later this month will be willing to offer an external fiscal stimulus to generate growth. The market is awaiting such signals before resuming activity,” the trader added.
However, a section of the market maintains that any new government will not rush into committing government funds as a fiscal stimulus and that local steel mills will have to adjust base prices to tackle the sluggish movement of HRC in the market.
At least two traders said that the market expectation is that domestic steel mills will lower base prices by $10-15/mt for June deliveries to stoke demand.
$1 = INR 69.53