Local Indian hot rolled coil (HRC) tradable prices have continued to edge up over the past week with the market factoring in another base price hike expected in June and the improved demand situation, SteelOrbis learned from trade and industry circles on Monday, June 14.
The tradable HRC price is up by INR 1,000/mt ($14/mt) to INR 72,000-73,000/mt ($984-997/mt) ex-Mumbai, while mills have maintained base prices mainly at INR 69,000-70,000/mt ($942-956/mt) ex-works.
“Local Indian HRC prices are still at a discount of 20-25 percent to the ex-China price on FOB basis and a discount of 15-20 percent to the landed price of imports. This is the prime reason for local steel mills’ optimism in pushing up prices further in the current month,” a steel sector analyst with a Mumbai-based financial services firm said.
“Our assessment is that domestic producers will target base prices of INR 76,000-77,000/mt [$1,038-1,052/mt] ex-works in the immediate term,” he added.
According to traders, trading activity during the past week showed significant improvement with manufacturing sectors in the west and north increasing plant utilization levels following the easing of lockdown restrictions, backing it with fresh bookings. They said that this would provide additional support to mills to go ahead with June base price increases.
Additionally, capacity utilizations of domestic steel mills over the past two months averaged around 80 percent following restrictions on the use of oxygen and hence relative tight supplies would further push up base as well as tradable prices in the coming month, the traders said.
$1 = INR 73.20
