Local Indian hot rolled coil (HRC) trade prices have continued to consolidate at higher levels, on a par with base prices of mills and even at a premium to mills’ prices in some regions amid a tightening of supplies due to the rapid restocking by trade channels and expected further base price increases in October, SteelOrbis learned from trade and industry circles on Monday, September 26.
Indian HRC trade prices have firmed up INR 700/mt ($9/mt) to INR 56,800/mt ($700/mt) ex-Mumbai, on a par with base prices of most integrated mills, and gained INR 1,000/mt ($12/mt) to INR 57,500/mt ($709/mt) ex-Chennai in the southern region, which is at a premium to mill’s base prices amid reports of tight supplies against the backdrop of large-volume bookings from traders.
“Apart from trade channels, a sharp rise in bookings was reported by mills from railway ancillary industries and packaging manufacturers for the oil sector. Moreover, the market is expecting a much more aggressive base price increase by mills in October, after the unexpected mid-September hike,” a Mumbai-based distributor said.
“We are expecting a base price increase in October of at least INR 1,000/mt ($12/mt) as supplies are tightening in the northern and southern regions,” he said.
At least two other traders maintained that the surge in ex-Russia HRC imports seen in the June-July period had come to a near halt as some buyers faced challenges in completing payments through established banking channels and tapering imports were providing additional support for local prices.
“The positive outlook is getting stronger. Demand is rebounding and because of prices are gaining even as mills which had gone in for annual maintenance are restarting and excess volumes are readily being absorbed in the market,” a source at an Indian mill said.
“Our pricing committee will meet after the festival holidays starting later this week to assess the October pricing strategy. Input costs are increasing too and will need to be factored in also,” the source said.
$1 = INR 81.10
