Local Indian hot rolled coil (HRC) base and tradable prices have remained at higher levels or have been increased by some mills, but trading activity has fallen to negligible levels as most major manufacturing hubs and cities have entered into a complete lockdown over the past week, SteelOrbis learned from trade and industry circles on Monday, May 17.
Sources said that HRC base prices by most major mills have remained at INR 62,000-67,000/mt ($841-909/mt) ex-works, while the tradable price has been heard at INR 67,000-68,000/mt ($909-923/mt) ex-Mumbai, also stable compared to the previous week. Nevertheless, according to market reports, one Indian steel producer JSW Steel voiced a further HRC base price increase of INR 1,750/mt ($24/mt) recently.
The sources said that, with all major cities Delhi, Mumbai, Kolkata and Chennai and states like the Maharashtra, Haryana and Punjab manufacturing hubs all under lockdown, traders are practically out of the market and only nominal volumes are heard to have been booked by a few end-users at the higher end of the traded price range.
However, despite the absence of market activity, leading producers have remained positive that both demand and prices will remain strong in the medium and long terms and that the impact of pandemic will be limited.
“Yes, prices are high compared to what they were in the past. But they are lower than anywhere in the world. I don’t think it should affect demand,” Tata Steel managing director T V Narendran said.
A steel sector analyst from a Mumbai-based financial rating firm said that, on landed price basis, local Indian HRC is still at a 10 percent discount compared to imports and currently that will continue to offer protection to local prices. However, he said that this dynamic of import protection can change quickly as there is a lot of talk in the market that the government is looking at reducing the seven percent import duty on steel and even considering a zero rate.
$1 = INR 73.65
