Local Indian hot rolled coil (HRC) trade-level prices have hardened significantly over the past week in reaction to three rapid consecutive base price hikes by mills in the current month but, with no material change in demand, trade activity has remained on the lower side, SteelOrbis learned from trade and industry circles on Monday March 30.
Sources said that HRC trade prices have moved up by INR 1,000/mt ($11/mt) to INR 56,000/mt ($591/mt) ex-Mumbai and by INR 1,500/mt ($16/mt) to INR 58,700/mt ($620/mt) ex-China in the south.
According to the sources, while the rapid base price increases have apparently been absorbed by the market up to now, buyers are only resorting to need-based bookings and are cautious not to lock up too much liquidity in inventories at a time when demand improvements are not foreseen ahead.
Several market participants do not rule out yet another base price hike by mills, citing steadily rising costs of imported raw materials amid geopolitical tensions and the month-long war in the Middle East.
They said that the market expects the next base price hike in early April to be around INR 1,000/mt ($11/mt).
“The market is in a critical balance at the moment. It has absorbed the hike in prices till now. But going forward, any further increase distinctly holds the risk of a correction. Inflationary pressures are building up across the economy on higher energy costs. An overall demand depression will further aggravate trade volumes,” a Mumbai-based distributor said.
