Local Indian hot rolled coil (HRC) traded prices have showed little change over the past week amid slow trading conditions with both distributors and end-users disappointed with the absence of market support from producers, who decided to maintain base price unchanged, and fresh bookings being deferred. The market participants were keeping a watch on the rising trend of the new wave of the pandemic, SteelOrbis learned from trade and industry circles on Monday, January 17.
Local HRC traded prices are still at INR 63,600/mt ($858/mt) ex-Mumbai and also unchanged at INR 63,250/mt ($853/mt) ex-warehouse in the southern regional market of Chennai.
“The market is on an edge and can move in either direction. A section of participants are disappointed with producers’ maintaining base prices and not supporting the demand revival. On the other hand, there is also a lot of talk among mills indicating price increases in February to offset rising input costs, including energy. Buyers, distributors and end-users are unlikely to increase market presence until a definitive new price trend emerges,” a Mumbai-based steel distributor said.
“There is divergence in outlook too. Producers are assessing prices to have bottomed out while users and analysts still see a further downside of 5-8 percent in the current month,” he said.
According to a report of brokerage firm J.P. Morgan, local HRC prices are unlikely to fall below the $800/mt mark, the lowest price seen in the 2021 calendar and demand is expected to increase incrementally in the current calendar year providing support for prices.
However, according to a steel sector analyst with a Mumbai-based financial advisory firm, local steel prices would face rising import competition in view of reports that the Indian government in the national budget of 2022-23 is likely to reduce steel import duties from the current rate of 7.5 percent.
He said that the government is also not in the “mood for renewing antidumping duties on steel products” as reflected in the recent rescinding of AD duties on cold rolled coil (CRC) and HRC from six countries and on color coated steel from China and the EU. This trend is expected to increase large inward volume shipments and resultant pressures on local pricing.
$1 = INR 74.15
