Local Indian HRC prices supported by higher volumes and budget expectations

Local Indian local hot rolled coil (HRC) prices have remained stable during the past week at around INR 40,800/mt ($682/mt) ex-works, supported by a rise in transaction volumes and expectations of prices firming up steadily over the next quarter, traders said on Tuesday, July 8.
 
"The markets are getting bullish ahead of the Indian budget later this week. Volume discounts have vanished. The markets expect the government to give demand boosters through the federal budget," a Mumbai-based trader said.
 
"Long steel products have been ahead on the upward price curve and are now showing some correction. The markets now expect it is time for HRC prices, which have been lagging behind, to show faster growth," he said.
 
"HRC prices have gained around six percent during the last quarter (April-June) and we expect prices to move faster in the next quarter, riding on government policy and higher expenditure on manufacturing," he added.
 
Market sources said that large domestic steel mills like Essar Steel and Tata Steel have already announced increased production for the current quarter (July-September), with a large part of the increased output to consist of flat products.
 
However, the increased production and higher supplies are unlikely to put any pressure on prices, the sources said.
 
Domestic mills are unlikely to face strong import competition with the Indian rupee showing volatility and weakening against the dollar, making imported HRC expensive. Furthermore, a weak local currency in the medium term would spur exports by local mills, accounting for part of the increase production of HRC by the mills, the sources added.
 
$1 = INR 59.86