Local Indian hot rolled coil (HRC) traded prices have continued to inch up amid sustained restocking by distribution channels as base price increases by producers are expected in the coming days, and this has offset the negative impact of slow bookings from end-users, SteelOrbis learned from trade and industry circles on Monday, April 4.
Indian trade HRC prices have firmed up by INR 500/mt ($7/mt) to INT 76,900/mt ($1014/mt) ex-Mumbai and are up INR 400/mt ($5/mt) to INR 77,400/mt ($1021/mt) ex-Chennai in the south.
Several players in trade circles said that the market is expecting a base price increase of at least around INR 2,000/mt ($26/mt) by domestic mills in the coming days and more hikes to follow later.
“Cost pressures will keep flat product prices high and no negative correction can be expected in the medium term, and hence intermediaries are restocking ahead of the next base price hike,” a Mumbai-based dealer said.
“However, end-users are resorting to only needed bookings, which is a cause of concern for the pace of stock movement. Most of the slowdown in stock movement is being borne by dealers, as producers are able to keep inventories at low levels supported by robust overseas sales,” he added.
At least two other traders maintained that end-users’ inventories are tight and industry circles make rough estimates that they currently have less than 45-day production equivalent of stocks, against the normal average of 60-70 days’ production equivalent.
This is in sharp contrast to dealers carrying larger stocks but still having to make fresh bookings to keep average stock procurement prices on the lower side, the traders said.
$1 = INR 75.80
