Local Indian hot rolled coil (HRC) trade prices have firmed up slightly in reaction to first-tier Indian mills hiking base prices for February by around INR 1,500 ($17/mt) mainly driven by reduced pressure from imports and expectations for a further supply tightening, with more mills opting for maintenance works this month.
Sources said that HRC trade prices have moved up INR 200/mt ($2.2/mt) to INR 48,700/mt ($557/mt) ex-Mumbai but have remained relatively stable at INR 49,000/mt ($560/mt) ex-Chennai in the south. “Domestic demand for HRC has remained relatively unchanged, but supply constraints will help maintain price stability in the short run,” a market insider told SteelOrbis.
The sources said that the market is expecting a slight tightening of supplies with at least two mills reported to be planning 20-30 days of maintenance shutdown of rolling mills and, coupled with expectations of safeguard duties on imports, this is currently supporting the market despite sporadic discounted sales by regional distributors.
However, according to a steel sector analyst with a Mumbai-based financial advisory firm, higher prices from mills and from some traders have been largely driven by supply-side factors but, without demand improvements, higher prices are unlikely to be sustained in the medium term.
“More clarity on the domestic price trend will emerge once business activity resumes in China. The impact of the much-talked-about new tariffs on steel imports by the US administration and resulting changes in flow of material across the global supply chain create the risk of a lot of export surplus from China and other exporting countries finding its way into India and this will impact local prices,” a market sources told SteelOrbis.
$1 = INR 87.50