Over the past week, prices in the local Indian hot rolled coil (HRC) market have remained unchanged at INR 47,500/mt ($642/mt) ex-works, amid subdued market activity and market participants cautious in making commitments in a rising price regime, traders said on Monday, October 15.
“Local HRC prices are on a consolidation phase and there is little downside risk as steel mills have all the pricing power. Hence dealers are very cautious in re-stocking high priced volumes as any slowdown in stock movement can result in significant working capital getting blocked,” a Mumbai based trader said.
“Government data on index of industrial production is also showing a slowdown. Hence the market is taking this as an indication of slow growth in manufacturing sector and this coupled with rising HRC prices does not make outlook very positive,” he added.
According to two other traders the unchanged prices was largely owing to festival holidays ahead and the market was expecting prices to get back on the uptrend as local steel mills were expected to go for another base price revision this month-end, the second hike in October.
$1 = INR 74.04