India hot rolled coil (HRC) prices have shown slight gains over the past week in reaction to the late announcement of base price hikes by mills to offset input cost increases, but trade-level gains have been modest amid thin trade volumes, indicating some resistance from buyers in the market.
Sources said that HRC trade prices are up INR 200/mt ($2/mt) to INR 45,700/mt ($510/mt) ex-Mumbai and have also gained INR 200/mt ($2/mt) to INR 47,800/mt ($533/mt) ex-Chennai in the south.
According to the sources, despite hiking base prices effective for December deliveries, large integrated mills are still accepting bookings at discounts to their revised listed prices, indicating a bearish mood, weak demand and the market having a limited capacity to absorb the higher prices.
“Early in the month, mills maintained November base prices, possibly factoring in slow movement of stocks. But the late December decision to increase listed prices was prompted by the rapidly depreciating Indian rupee significantly increasing the landed price of imported raw material like coking coal, forcing the price increase,” a Mumbai-based distributor told SteelOrbis.
“The trade conditions are lackluster without any positive drivers. We expect prices to move within a narrow range in the short and medium term. Buyers are already adopting need-based bookings and are not willing to risk inventory build-ups both at the producer and user ends,” he added.
