Local Indian hot rolled coil (HRC) trade prices have moved up over the past week, finding support from tighter supplies and the fall in import bookings, but trade volumes are reported to be low due to buyers’ resistance to the higher prices, SteelOrbis learned from trade and industry circles on Monday, April 28.
Sources said that HRC trade prices have risen by INR 1,000-1,200/mt ($12-14/mt) to the range of INR 52,500/mt ($615/mt) ex-Mumbai and are reported at INR 53,500/mt ($627/mt) ex-Chennai in the south. According to market insiders, the flow of materials from mill-to-market has continued to remain tight with at least three large mills currently under maintenance shutdowns, and this offers support to prices even though buyers among industrial users have remained cautious and aggregate fresh bookings are on the lower side.
Besides, based on information on vessel arrivals, about 65,000 mt of flat products are scheduled to land at local ports in the April 21-30 period, which is much lower than expected, and new import bookings are reported to be minimal in the wake of the imposition of 12 percent safeguard levy, enabling trade prices to consolidate higher.
“Despite the price increases seen recently, the mood in the market among buyers is very poor, reflected in sluggish trade activity. Small and medium-sized industrial users are almost out of the market and are unwilling to commit bookings at the distributor level, being averse to higher prices,” a Mumbai-based distributor told SteelOrbis.
“The entire strengthening is hinged on the supply side, on the fall in movement from mill to market and negligible import pressure. Hence, the market stability is tenuous. The supply-side dynamics are likely to change in May once mills under shutdown come back into production and this will change the direction of trade price movement,” he added.
$1 = INR 85.40