Local India hot rolled coil (HRC) trade prices have remained stable amid steady restocking by trade channels, but the recent uptrend attributed to more mills coming back into production after annual maintenance, easing the supply tightness seen earlier, SteelOrbis learned from trade and industry circles on Monday, October 10.
However, a section of the market has maintained that HRC trade prices will return to consolidating at higher levels, with mills reportedly already considering a second base price hike later in the month, riding on the robust demand from industry and trade. Market expectations are for the second base price hike to be around INR 1,500/mt ($18/mt), which is likely to be the next trigger for trade prices to edge up.
Meanwhile, trade HRC prices have remained at INR 57,800/mt ($702/mt) ex-Mumbai and INR 58,500/mt ($711/mt) ex-Chennai in the south.
“Two integrated large mills resumed production after annual maintenance shutdowns over the past 15 days and increased supplies checked the rising trade price. But this is not much of a concern as demand from both trade and industrial users is getting stronger as business activity increases after the festival holidays,” a Mumbai-based distributor said.
“Domestic mills have raised base prices by around INR 1,000/mt ($12/mt), which is considered to be conservative. The second expected base price revision in October is likely to be more aggressive as a strong seller’s market is emerging,” he said.
However, a steel sector analyst with a Mumbai-based financial advisory firm maintained a note of caution, pointing out that the domestic steel industry cannot remain “de-coupled from global recessionary trends.” He said global steel prices continue to remain under pressure, inflationary conditions are worsening across markets, interest and energy costs are rising, and these factors will inevitably come into play in the steel sector too and the resultant impact on prices of finished steel.
$1 = INR 82.33