Indian hot rolled coil (HRC) prices have continued to surge in reaction to mills starting to go in for second base price hikes for March and amid robust demand, with mills eliminating risks of any market resistance, SteelOrbis learned from trade and industry circles on Monday, March 14.
The trade reference prices have moved up to INR 74,400/mt ($971/mt) ex-Mumbai, up from INR 68,400/mt ($893/mt) a week ago, so adding INR 6,000/mt ($78/mt) over the past week. The price has reached INR 71,950/mt ($939/mt) ex-Chennai in the south, rising by INR 4,000/mt ($52/mt).
“Local prices are rallying on a combination of higher ex-mill prices and robust demand reflected in rapid bookings by end-users and restocking by intermediaries as the market expects more rounds of price increases by producers, driven by surging coal prices,” a Mumbai-based steel distributor said.
“Supplies are tightening as producers are seeing strong demand from EU buyers at offers as high as $1,250/mt CFR. As the year draws to a close on March 31, mills will significantly increase export allocations for the first quarter of the new fiscal and, with plant utilizations already at optimal levels of above 90 percent on average, local supplies will remain tight, providing support for higher prices, and hence dealers are building up inventories,” he said.
“We are seeing strong export opportunities in MENA and the EU, and we can still offer HRC at $100/mt less than the local offers prevailing in these markets. But our production costs are increasing as prices of coal and energy are going up on a daily basis. In our assessment, about INR 2,000/mt($26/mt) still remains uncompensated for even after two rounds of base price increases in March,” an official at a private mill said.
“The geo-political situation is such that producers’ usual practice of monthly base price revisions is irrelevant. We now have to assess costs and prices almost on a daily basis,” he said
$1 = INR 76.60
