Local Indian hot rolled coils (HRC) prices have remained at higher levels over the past week, indicating that the base price increase announced by integrated steel mills earlier this month has been absorbed by the market, supported by expected improvements in manufacturing, as SteelOrbis has learned from trade and industry circles.
Most integrated steel mills have completed the announcement of higher base prices, pushing them up to INR 69,000-70,000/mt ($932-946/mt) ex-works for August, and are reported to be receiving firm inquiries in the export and local markets. Nevertheless, the tradable level is still lagging behind, reported by market sources to be at INR 67,000/mt ($905/mt) ex-warehouse or a maximum of INR 1,000/mt higher.
Distributors are anticipating the uptick in the manufacturing sector reported in July will gain momentum ahead of the festival months, supporting steel prices. India’s manufacturing sector growth index in July this year rose to 53 percent, the highest level in three months, following a contraction in June.
At least one official at a private steel mill observed that, with recent base price hikes being absorbed by the market and if local and export bookings are sustained over the next few weeks, producers could well start working on another price revision shortly.
The official said that the manufacturing sector overall has been showing positive signs and, with strong government support for infrastructure spending, steel prices will continue to consolidate at higher levels, supported by the fact that local prices are still at a 15-18 percent discount to the landed price of imports.
However, sources said that a further increase in prices would be ‘incremental’ and not ‘sharp’ and that producers are more likely to go in for several increases of around INR 1,000/mt ($14/mt) over the next one quarter rather than a single steep hike.
$1 = INR 74.00