Signs of a correction have emerged in the local Indian hot rolled coil (HRC) market with prices suffering setbacks amid a “price rise fatigue” and inventory increases in trade channels, but expectation of mills increasing base prices in the coming week still persist, SteelOrbis learned from trade and industry circles on Monday, October 16.
Sources said that local HRC trade prices have lost INR 600/mt ($7/mt) to INR 58,400/mt ($702/mt) ex-Mumbai and are down INR 500/mt ($6/mt) to INR 58,800/mt ($707/mt) ex-Chennai in the south.
The sources said that trade channels are reported to be quoting lower prices to liquidate inventories and have slowed down fresh bookings, triggering the first signs of a correction in the market.
But most market participants averred that the negative signs would not deter mills, which are heard to be already discussing increasing base prices in the coming week citing the rise in input costs, particularly imported coking coal prices. They expect the base price increases to be in the range of INR 1,000-1,500/mt ($12-18/mt).
“There are ample supplies in the market and traders are offering lower quotes to improve their cash flow ahead of the festivals. But our assessment is that the correction will be a minor one,” a Mumbai-based distributor told SteelOrbis.
“Mills will continue to increase base prices. It is possible this will be in increments with one hike expected next week and followed by another early next month. Of course, it is hard to make any assessment on the geopolitical issues in the Middle East and their impact on the local market,” he added.
$1 = INR 83.20