Local Indian hot rolled coil (HRC) trade prices have surged as mills have commenced hiking base prices and also due to the tightening of supplies, SteelOrbis learned from trade and industry circles on Monday, October 3.
Sources said that trade prices are poised for a further sharp upward movement once full business activity resumes as two mills have announced higher prices during the festival holidays.
According to the sources, local trade HRC prices are up INR 1,000/mt ($12/mt) to INR 57,800/mt ($710/mt) ex-Mumbai and to INR 58,500/mt ($719/mt) ex-Chennai in the south.
The sources said that the trade price premium to the base prices of mills is expected to rise further, as more traders come back to business after the next three days and also because mills have reported a sharp drawdown in inventory levels, resulting in trade channels receiving lower volumes than expected.
“The market has not had time to fully react to the new higher mill prices. Some trade channels in the east and north are closed. So, there is still a lot of headroom for trade prices to move up,” a Mumbai-based distributor said.
“Bookings by industrial users are picking up pace. Coupled with steady restocking by trade channels, our assessment is that producers have a lot of scope to go in for further increases in price later in October, leading to a virtuous cycle of positive demand supporting higher prices,” he said.
$1 = INR 81.40
