Local Indian hot rolled coil (HRC) prices have continued to surge for the fifth consecutive week, gaining INR 1,000/mt ($14/mt) week on week to INR 38,000/mt ($531/mt) ex-works as domestic steel mills prepare to hike base prices over the next week and increased expectations that a government fiscal stimulus will boost demand in the national budget next month, SteelOrbis learned on Monday, January 6.
According to traders, there is a rush to make fresh bookings by end-users and market intermediaries as it is inevitable that all local steel mills will aggressively push to increase base prices and increase sales revenues as the current fiscal year draws to a close.
The traders pointed out that HRC prices have already gained INR 1,750/mt ($24/mt) over the past two weeks, and the market expects that domestic steel mills could go in for two rounds of base price increases in a single month, triggering a hurry to restock across market participants.
“Steel producers are bullish on the revival in manufacturing and they will continue to force prices up. Sustainability of the uptrend will depend a lot on support from the government, which must show its intention of higher spending to boost growth in the forthcoming budget,” a steel sector analyst with a Mumbai-based financial consultancy firm said.
“Local steel producers will continue to press for higher prices to factor in higher input costs. Iron ore miner NMDC Limited has already announced a price increase after eight months. Steel mills without captive iron ore mines are starting negotiations for new supply contracts with private iron ore miners for the new fiscal year and new contracts will see much higher raw material costs, forcing steel mills to continue to push finished steel prices higher. Higher export realizations will also help steel mills to support local prices,” he added.
$1 = INR 71.60
