Tradable price of local India hot rolled coils (HRC) remained under pressure over the past week on sluggish trading activity in the secondary market even though reports in the market indicated a fall in average inventory levels of producers and speculations of base price hike by mills next month, SteelOrbis learned from trade and industry circles on Monday, August 23.
The traded price was heard in range of INR 66,500-67,000/mt ($893-900/mt) ex-Mumbai, compared to INR 67,000-68,000/mt ($900-913/mt) ex-Mumbai a week ago.
Base price of mills were maintained closer to INR 70,000/mt ($940/mt) ex-works with a large section of market participant speculating for a September base price increase driven by reports of fall in mills’ level inventories.
“The weakness seen in secondary market prices is largely owing to sluggish trading activity as the post-monsoon season uptick in demand is below expectations and dealers are slowing down on restocking and instead preferring to clear inventories offering volume discounts,” a Mumbai based flat steel distributor said.
“A slight mismatch is noticeable in price outlook between producers and the secondary market. Producers are looking for an increasing base price in September, riding on back of fall in inventories. But market intermediaries are seeing continuation of slow bookings and are liquidating existing stocks and even reports of possible base price hike is not seeing any re-stocking,” he added.
At least two traders said that mills could be expected to increase HRC base price by around INR 2,000/mt ($27/mt), pointing out to reports coming from Tata Steel claiming that consumption is expected to reach pre-Covid levels in the coming quarters and imports still 12-15 percent more expensive than local prices.
$1= INR 74.44
