Local Indian hot rolled coil (HRC) trade prices have increased slightly in reaction to the tightening of supplies and extended delivery timelines from stockyards even as demand has remained on the weaker side, SteelOrbis learned from trade and industry circles on Monday, March 3.
Sources said that HRC trade prices are up by around INR 600/mt ($7/mt) to INR 49,000/mt ($562/mt) ex-Mumbai, while they have gained INR 300/mt ($3/mt) to INR 50,000/mt ($573/mt) ex-Chennai in the south. “In India, mills are trying increase effective this month, but we still see resistance in the market,” an Indian trader told SteelOrbis.
According to the sources, with mills of Tata Steel Limited and JSW Steel Limited already announcing maintenance shutdowns and a few others to follow at the end of March, there has been a slowdown of mill-to-market stock movement, providing support for trade prices despite the absence of any demand uptick.
The sources said that in southern region, delivery timelines from stockyards to end-users have been extended owing to the drop in stockyard inventory, coupled with localized logistical and transportation issues, triggering reports of some smaller-volume deals being quoted at higher levels of INR 51,000/mt ($585/mt) around trade hubs near Chennai.
“The supply side tightening and its impact on prices is a very short-term dynamic. Trade prices continue to face higher downside risks from sustained weak demand and apprehensions of dumping as more volumes get diverted to economically growing India, after exports face the brunt of higher tariffs in the west. Producers and trade will continue to face pressures on margins,” a steel sector analyst at a Mumbai-based financial advisory firm told SteelOrbis.
“The market continues to wait for a safeguard duty on imports. It will offer temporary relief to pressures on prices. But the longer-term outlook will remain bearish. Under these circumstances, it will be important to see how producers decide on base prices for March deliveries in the coming days,” he added.
$1= INR 87.20