Local Indian hot rolled coil (HRC) trade prices have continued to show slight increases this week in a market abuzz with chatter about aggressive base price hikes by mills for the current month and a sharp drop in import projections, even though trade volumes have remained low as buyers have resisted higher price levels, SteelOrbis learned from trade and industry circles on Monday, May 5.
Sources said that trade-level HRC prices have gained INR 300/mt ($4/mt) to INR 52,800/mt ($627/mt) ex-Mumbai and are up INR 300/mt ($4/mt) to INR 53,800/mt($638/mt) ex-Chennai in the south.
The sources said that a section of distributors have been restocking at premiums expecting large mills to announce big rises in base prices leveraging lower import competition. They said that tentative indications from producers are that base price increases could be large in the range of INR 2000-2,500/mt ($24-30/mt) for May deliveries.
Based on information on vessel arrivals, trade circles estimate total flat product imports in May to be in the range of 90,000-120,000 mt, significantly lower than the 280,000 mt shipped into the country in April.
“Prices are gaining on supply-side dynamics while demand remains sluggish and large industrials are making need-based bookings. Consumers are unwilling to carry large inventories of high-priced materials,” a Mumbai-based distributor told SteelOrbis.
“Some mills will get back into production after maintenance shutdowns this month. But we do not think that this will impact the price much with producers maintaining aggressive pricing. On the balance between higher prices and low demand, we shall see falling trade volumes in the days ahead,” he added.
$1 = 84.26