Local Indian hot rolled coil (HRC) trade prices have inched up but the gains have been modest in comparison with the aggressive base price increases announced by large mills over the past week, indicating “some fatigue” among buyers over the sharp sustained uptrend seen in the market over the past several weeks, SteelOrbis learned from trade and industry circles on Monday, October 9.
Sources said that trade HRC prices are up INR 100/mt ($1.20/mt) to INR 59,000/mt ($709/mt) ex-Mumbai and are up INR 150/mt ($1.80/mt) to INR 59,300/mt ($713/mt) ex-Chennai in the south.
They pointed out that, following aggressive base price hikes by mills and trade prices reacting very “modestly”, both mills’ listed prices and trade price are almost on a par and the disappearing premium of trade prices over base prices indicates a correction may be round the corner.
“Prices have been on a sharp uptrend during the past several weeks and buyers, particularly in trade channels, were turning very cautious in committing large bookings to restock,’ a Mumbai-based trader told SteelOrbis.
“A correction may set into the market unless there is a commensurate uptick in the demand situation. Our assessment is that trade prices will remain range-bound, until there are significant changes on either side of the demand-supply equation,” he added.
However, at least two officials with integrated mills said that they have already started assessment of further base price increases in October, in response to the hardening of the price of imported coking coal.
They said that large mills have mostly adopted strategic pricing not to absorb the rise in input cost but to pass it on to consumers, although the issue of the size of the mid-month increase is yet to be assessed.
$1 = INR 83.20
