Local Indian hot rolled coil (HRC) prices have remained unchanged during the past week at around INR 40,500/mt ($679/mt) ex-works amid low transaction volumes as domestic mills have shifted their focus to long products, traders said.
After deferring any price adjustments for HRC until next month, local steel mills have shifted their focus to long products, anticipating a spurt in demand ahead of the monsoon rains on the back of higher infrastructure spending by the new Indian government to take charge later this month, a Mumbai-based trader said.
With the expected INR 500/mt ($8/mt) price cut in HRC delayed, volumes have fallen sharply, with buyers postponing fresh bookings, the trader said.
Demand for flat products has been at a very low level from user industries like the automotive sector, which is still struggling with falling sales. But, at the same time, inventories of flat products at mills have been very low and, with the anticipated rise in demand from infrastructure projects, mills increased their long product prices by INR 500/mt ($8/mt) last week, he added.
Market sources said that HRC prices are expected to stagnate until such time as steel mills adjust prices and pass on benefits of falling input costs like coking coal to consumers, thereby boosting demand.
$1 = INR 59.61