Local Indian hot rolled coil (HRC) trade prices have recorded gains for the second consecutive week, consolidating at higher levels amid active restocking by trade channels, slight improved bookings from end-users, and expected base price increases by mills next month, SteelOrbis has learned from trade and industry circles on Monday, July 31.
Sources said that HRC trade prices are up INR 400/mt ($5/mt) to INR 56,000/mt ($680/mt) ex-Mumbai and have gained INR 500/mt ($6/mt) to INR 54,800/mt ($666/mt) ex-Chennai in the south.
They said that there was a market consensus that mills would increase August base prices but there are differences on the quantum of the increase which was predicted widely at INR 1,000/mt ($12/mt) on the conservative side and at INR 3,000/mt ($36/mt) at the highest estimate.
“We expect prices to consolidate at higher levels. There is a slight improvement in end-use demand matched by a tightening of supplies, with several mills taking maintenance shutdowns. Import bookings have been steady, but this is having a limited impact on prices since imports are filling up the supply gap in the market following the maintenance shutdowns of the mills,” a Mumbai-based distributor told SteelOrbis.
Over the past week, ex-Vietnam bookings of more than 60,000 mt were concluded at around $615/mt CFR Nhava Sheva and Chennai ports, while ex-China HRC was booked at $612-615/mt CFR last week, as SteelOrbis reported.
An official at Steel Authority of India Limited (SAIL) said that trade prices have bottomed out, but increases will be “gradual and slow” as the fundamentals of industrial demand remain under pressure from inflation and the higher costs of borrowed funds.
He said that the short-term direction would be determined by post-monsoon (September-October) growth in industrial demand, and mills can be expected to go in for small increases in base prices, if the supply side remains tight.
$1 = INR 82.30
