The uptrend in the local Indian hot rolled coil (HRC) traded prices has continued to gain momentum riding on sustained strong bookings from end-users, restocking by market intermediaries and signals of producers likely to go in for second base price hike for the current month, SteelOrbis learned from trade and industry circles on Monday, February 7.
The traded HRC price is up by INR 1,000/mt ($13/mt) to INR 66,600/mt ($892/mt) ex-Mumbai, while it has gained INR 1,000/mt ($13/mt) to INR 66,750/mt ($894/mt) ex-Chennai in the south.
“Demand is showing strong improvements in the key industrial belts of the west and north, leading to large-volume bookings by end-users. The government’s focus on growth through pump-priming manufacturing through higher government spending will sustain the demand curve,” a Mumbai-based steel distributor said.
“We are learning that large integrated mills are considering another base price increase for February deliveries by a large dose of at least INR 2,000/mt ($26/mt) soon, to offset rising coke and iron ore prices. Even at current levels, domestic realizations of mills from domestic sales are higher than from exports,” he said.
A steel sector analyst with a Mumbai-based financial advisory firm said that a short- and medium-term correction is being discounted by the market and that traded prices touching a historical peak of INR 70,850/mt ($948/mt) are a distinct possibility during the current bull run.
The analyst said that consumption of 9.29 million mt last December, the highest in 2021, was expected to be surpassed in January-February 2022 and that this would provide support for the rising market trend.
$1 = INR 74.70
