Local Indian hot rolled coil (HRC) prices have remained stable over the past week amid a lot of talk of mills considering an end-of-August base price increases and limited supplies from mills providing stability to the market, even though trade activity has remained muted amid the national Independence Day holidays.
Sources said that HRC trade prices have remained unchanged at INR 56,400/mt ($679/mt) ex-Mumbai and stable at INR 55,600/mt ($669/mt) ex-Chennai in the south. There were reports that certain grades of HRC being quoted higher at around INR 57,000/mt ($686/mt) by traders in the southern market owing to limited volumes being available in trade channels.
Despite lower trade activity attributed to the holidays and the extended weekend, prices have maintained strong amid a lot of market chatter about a second base price hike in August by at least INR 1,000/mt ($12/mt) and optimism among traders for a demand uptick from September onwards as industrial output is expected to increase in the post-monsoon busy season.
“Import competition is low. Ex-China prices have fallen. But the benefit has been negated by the Indian rupee falling to a record low against the US dollar,” a source at Steel Authority of India Limited (SAIL) told SteelOrbis.
“There is a lot of optimism among mills that they will be able to improve margins in the second half of the fiscal year. There are opportunities to increase prices but the quantum of such a hike is yet to be decided,” another source said.
However, according to a Mumbai-based distributor, there will be a “reality check” in the market once mills closed for maintenance resume operations at the end of August and in early September and there are increased supplies coming in. However, he maintained that downside risks to current local prices are minimal amid the demand revival and the “nominal” import bookings seen over the past weeks.
$1 = INR 83.10
