Local Indian hot rolled coil (HRC) prices have continued to perform strongly during the past week with the gap between base and tradable prices narrowing amid high trading activity and anticipation of a November price hike by integrated steel mills, SteelOrbis learned on Monday, November 2.
A number of market participants and officials at steel mills said that the latter are expected to increase HRC base prices by a range of INR 1,500-2,000/mt ($20-26/mt) for November deliveries over the next fortnight, citing rising costs of iron ore and expectations of higher prices being absorbed in a market of tightening supplies.
While HRC base prices have been maintained in the range of INR44,000-44,500/mt ($594-601/mt) ex-works so far, tradable prices have inched up, moving closer to the base listed prices, as supplies have continued to tighten and amid several reports indicating that end-users have not been receiving volumes as per bookings submitted.
Tradable prices have inched up to levels of INR 43,500-44,000/mt ($587-594) ex-warehouse in western regional markets, compared to bookings made by integrated mills at INR 43,000-43,500/mt ($580-587/mt) ex-warehouse in earlier weeks.
At least two traders said that the ever-tightening supplies at mills operating at close to maximum plant capacities have been reflected in several reports of end-users having to make bookings at close to base price or with ‘an unofficial premium’ for immediate deliveries.
In the case of December deliveries, a few end-users have reported bookings at a premium of 1-2 percent over base prices, the traders added.
The unavailability of required volumes by large end-use industries has triggered a marginal revival in imports. Though inward volume shipments have been very low, the fact that it is rising from a near zero from March onwards indicates that the supply-side tightening has been providing support for local prices.
Unofficial trade data showed that HRC imports in September this year were around 0.3 million mt, up from 0.09 million mt in August 2020, market sources said.
$1 = INR 74.10
