Local Indian hot rolled coil (HRC) base prices have remained unchanged, although trading activity has fallen during the past week as buyers, end-users and market intermediaries have been waiting to see lower prices soon, SteelOrbis learned from trade and industry circles on Monday, July 5.
While the market until late last month had been factoring in a base price hike by integrated steel mills, at the moment a weakening of prices is awaited in view of the uncertain export outlook.
It has been pointed out that integrated steel mills have not yet finalized export allocations for the second quarter of the current fiscal year in view of uncertainties in the EU market and the large volumes still awaiting export quota allocations. It has been argued by a section of local market participants that local Indian mills will have to take a strategic pricing decision for local sales because of lower overseas shipments and consequently higher volumes needing to be pushed into the domestic market.
Sources said that for now the average base price range has remained at INR 69,000-70,000/mt ($922-935/mt) ex-works, but the tradable price level, which was at above INR 73,000/mt ex-Mumbai in June, is hardly above INR 68,000/mt ($909/mt) ex-Mumbai.
“I would presume mills are taking time to assess the export market and hence allocations. This will weigh on local prices. Asian buyers are showing less appetite for ex-India HRC. Demand in the EU, on the contrary, is very strong, but import safeguards are unnerving buyers,” a steel sector analyst with a Mumbai-based financial services firm said.
$1 = INR 74.80