Local Indian hot rolled coil (HRC) traded price surged towards the close of last week in reaction to hikes in base prices by domestic steel mills and rapid restocking by market intermediaries and also expectations of large fiscal outlays in the national budget 2022-23, SteelOrbis learned from trade and industry circles on Monday, January 31.
Sources said that traded prices are up by a range of INR 1,500-2,000/mt ($20-27/mt), but have remained at a discount to mills’ new base prices for February.
According to sources, traded price have gained INR 2,000/mt ($27/mt) to INR 65,600/mt ($875/mt) ex-Mumbai, while moving up by INR 1,500/mt ($20/mt) to INR 65,750/mt ($877/mt) ex-Chennai in the south. But trade prices remain at a discount to base prices of mills at INR 68,000-69,250/mt ($906-923/mt) ex-works.
“Mills have increased base prices to offset the rise in input costs. But we expect a February rebound in demand and narrower spreads with trade prices. Before the end of the current quarter, a market improvement can bring trade and base prices on a par,” a source at ArcelorMittal Nippon Steel Limited (AMNS) said.
“Faster movement of stocks through channels of mill-to-market will enable traders to increase reference prices in the coming two months of the current fiscal year,” the source said.
According to a Mumbai-based steel distributor, the divergence in the long and flat product markets seen recently is flattening. He said that, with long steel products consolidating at higher levels over the past few months, the flat product market too is expected to become aligned supported by expected large fiscal outlays by the government in 2022-23 to boost manufacturing sector demand.
$1 = INR 75.00
