Local Indian hot rolled coil (HRC) trade prices have remained relatively stable given that efforts by domestic mills to increase HRC prices in the local market have been unsuccessful, primarily due to the ongoing slowness of demand and the oversupply in the country driven by higher production by local mills as well as increased imports, especially in the western Indian markets.
Sources said that HRC trade prices have remained at INR 48,300/mt ($558/mt) ex-Mumbai and at INR 49,800/mt ($575/mt) ex-Chennai in the south. However, according to sources, actual deals are at discounts which are difficult to estimate but discounted prices are speculated to be as low as INR 46,500-47,000/mt ($537-543/mt) levels.
Notably, last week, large local integrated mills increased base HRC prices by INR 1,000-1,500/mt ($12-17/mt) riding on expectations that the government will shortly impose a safeguard duty on imports along with a doubling of the basic customs duty to 15 percent.
“Price gains from mills are standing in line with expectations of domestic producers getting tariff protection. However, in the absence of any improvement on the demand side and persistent sluggish manufacturing, the market will continue to see strong buyer resistance going forward,” a Mumbai-based trader told SteelOrbis.
“Fiscal year-end considerations, the challenging liquidity situation among market intermediaries, and the already higher-than-average inventories will keep trading volumes at the current low levels. There are very few positive drivers in the market. Protection from the government will decide the market movement in the coming days,” another source added.
$1 = INR 85.90