Mixed expectations for short-term trend of local Indian HRC market

Local Indian hot rolled coil (HRC) prices have remained stable during the past week at around INR 37,000/mt ($584/mt) ex-works, though transaction volumes have remained negligible amid expectations that the downward correction may not yet have run its course, traders said on Tuesday, December 16.
 
According to a Mumbai-based trader, after a sharp correction of $16/mt at the beginning of the month, local prices have taken a breather and remained stable for technical reasons.
 
However, most buyers have remained on the sidelines and have not concluded fresh bookings as the fall in manufacturing growth and low demand for HRC have fuelled expectations that the downward correction could gather momentum in the short term again, the trader said.
 
At the same time, year-end considerations have also contributed to the dull market conditions, he added.
 
Nevertheless, a section of market traders have maintained that any further downside movement of local HRC prices will be limited as the falling Indian currency and the easing of import competition will provide some support. The Indian rupee has lately seen one of its sharpest falls against the dollar and is currently quoted at around INR 62.94 to a dollar, with such an exchange rate making imported HRC unviable, and this has been reflected by the fact that no import transaction has been reported in the market during the past week, sources said.