The third base price hike in March by Indian domestic steel mills and clear signals for more next month have triggered a fresh surge in local hot rolled coil (HRC) trade prices on the back of robust restocking by market intermediaries and a tightening of supplies as producers seek to push higher volumes overseas for improved margin realizations, SteelOrbis learned from trade and industry circles on Monday, March 28.
Indian HRC traded prices have surged by INR 2,000/mt ($26/mt) to INR 76,400-77,000/mt ($1,000-1,007/mt) ex-Mumbai and are up INR 5,000/mt ($65/mt) to INR 77,000/mt ($1,007/mt) ex-Chennai in the south.
Though unconfirmed, at least two traders said that they have heard of secondary sales by dealers in the northern market at trade prices as high as INR 80,000/mt ($1,047/m) ex-Delhi for immediate delivery against 100 percent cash advance.
“It’s a complete sellers’ market. Mills keen on pushing larger volumes overseas are tending to reduce booking volumes of local intermediaries, tightening the supplies available in the local market, increasing the premium over base prices of mills,” a Mumbai-based trader said.
“Several rounds of base price increases are expected during April as mills are claiming to have uncompensated costs even after three rounds of base price increases. For April, the market has factored in price increases of at least INR 5,000/mt ($65/mt), leading to rapid restocking by end-users and dealers,” the trader said.
A number of market participants said that the next base price increases by mills could come as soon as April 1, as soon as supply contracts with small and medium-scale manufacturing units end at the end of the current fiscal year on March 31.
$1 = INR 76.40
