After recording gains in the previous two weeks, prices in the local Indian hot rolled coil (HRC) market have taken a pause during the past week, remaining unchanged at INR 46,300/mt ($681)/mt ex-works, even as fresh bookings by dealers slackened significantly, traders said on Monday, June 18
“Indian steel mills having completed hiking their base prices earlier in the month, while traders seem to be reacting by reducing their fresh booking volumes in the absence of any demand uptick,” a Mumbai-based trader said.
“It is still difficult to say if HRC prices will be adjusted as dealers across India lower their booking volumes. But with mills enjoying a lot of pricing power and given the low import competition, a downside correction from current levels can be expected to be on the lower side,” the trader added.
According to two other traders, in the short term local HRC price movement will also be impacted by Indian shipments overseas and the resultant impact on mills' inventories.
Market sources said that one large Indian steel mill clinched an HRC export contract for an estimated 25,000 mt to Vietnam. And if export opportunities gain momentum over the coming weeks with a significant drawdown on mills' inventories, any possibility of a downward correction in local prices could be ruled out despite reduced fresh bookings by local traders.
$1 = INR 68