Local Indian hot rolled coil (HRC) trade prices have recorded strong gains as most integrated mills have completed hikes in January base prices and also amid an expected aggressive sales push overseas and the anticipated tightening of supplies for domestic sales, SteelOrbis learned from trade and industry circles on Monday, January 9.
Indian HRC trade prices have moved up INR 2,400/mt ($29/mt) too INR 56,900/mt ($687/mt) ex-Mumbai and are up INR 2,000/mt ($24/mt) to INR 56,200/mt ($679/mt) ex-Chennai in the south.
Several sources in trade and industry maintained that, having completed domestic base price hikes, mills are preparing to submit fresh overseas offers at higher levels and to increase export allocations for the last quarter of the current fiscal year to leverage the rebound in prices in select global geographies, resulting in a possible fall in domestic supplies.
However, some sections of the market think that higher exports would only give a limited short-term boost to local prices.
“Mere supply-side changes are not likely to provide sustainable support for prices without any material change in sluggish demand and stock movements from mill-to-market. Manufacturing growth and inflationary pressures will continue to offer strong headwinds to the domestic demand recovery,” a steel sector analyst at a Mumbai financial advisory and rating agency said.
“Higher export allocations for January-March quarter cannot be expected to fully offset lower trade volumes in the local market. Macro fundamentals continue to remain weak. All eyes are on the national budget scheduled to be placed before parliament next month and government capital expenditure will set the market direction for the next few months,” he said.
An official at a private mill said that a second round of base price increases of around INR 1,000/mt ($12/mt) could be considered at the end of January after assessing overseas sales volumes and price realizations.
$1 = INR 82.80
