The downturn in the local Indian hot rolled coil (HRC) market has been reversed during the past week, with trade prices moving up in reaction to mills increasing base prices and more rounds of upward revision on the cards over the next few weeks and the full order books of producers at least until the end of March to April, SteelOrbis learned from trade and industry circles on Monday, February 27.
Indian HRC trade prices are up INR 1,000/mt ($12/mt) to INR 59,300/mt ($717/mt) ex-Mumbai and up INR 1,200/mt ($14/mt) to INR 59,200/mt ($715/mt) ex-Chennai in the south.
Sources said that large integrated mills have increased HRC base prices by INR 500/mt ($6/mt) but this is a modest increase and the market considers this to be an “interim pricing” and more increases are expected over the next few weeks and trade channels are also expected to follow suit.
According to a steel sector analyst with a Mumbai-based financial advisory firm, most large mills have order books full at least to March both for exports and local sales and, in view of rising costs of coking coal and coatings like zinc, they are expected to continue to increase base prices rapidly.
“But questions continue to persist over how end-consumer demand will move as the fiscal year nears its end. Producers have headroom to increase base prices by around INR 1,000/mt [$12/mt] in the next round. Our assessment is that, overall, end-users will keep fresh bookings restricted to conserve liquidity at the end of the year end and this will lead to high prices and low trading market conditions,” he said.
“Steel prices are moving up in Europe and the US and this will offer support for domestic mills to focus on increasing overseas sales. We are going to see higher export allocations by mills for the first quarter (April-June) of fiscal 2023-24,” he said.
