Indian domestic hot rolled coil (HRC) prices have just about been maintained at INR 36,250/mt ($646/mt) helped by the 1.2 percent slide in the rupee against the dollar on Monday, July 23, but several mills have increased the discount rate from $6/mt to $10-12/mt, a Delhi-based trader said on Tuesday, July 24.
A large number of ex-Russia and ex-China offers for September shipment are reported to be standing at $620/mt CFR, but Indian mills are keeping their official HRC domestic prices unchanged for the time being, keeping an eye on the possibility of higher iron ore supplies and interest rate corrections.
The rupee declined 1.2 percent against the US dollar on Monday and closed the day at INR 55.97, the biggest drop since June 22, and the volatility is currently offering a modest check to imports, the trader said.
Bu hafta başında Hindistan'da rupinin ABD doları karşısında %1,2 değer kaybetmesine bağlı olarak yerel piyasada sıcak rulo fiyatları 36.250 rupi/mt (646$/mt) seviyesinde korunsa da, SteelOrbis'e açıklama yapan Delhili bir tüccardan alınan bilgiye göre çeşitli üreticiler sıcak ruloda indirim oranlarını 6$/mt'dan 10-12$/mt seviyesine yükseltti.
With China's Baosteel and Russia's Severstal announcing reductions in HRC prices last week, Indian mills may have to follow suit very soon unless European debt concerns continue to exert increasing pressure on the rupee, he added.
The Reserve Bank of India (RBI) has scheduled its mid-term review of credit policy for July 31, 2012 and if industry expectation of an interest rate cut become a reality, the lower cost of borrowing could trigger a spurt in imports.
A number of iron ore mines in Karnataka were scheduled to get back into production starting next month, and with increased availability of raw material major Indian HRC producers like JSW Limited and Essar Steel would increase output.
Hence, supply side pressures would increase on ex-mill domestic prices of HRC and a price cut for August-October by mills would be determined by the currency movement over the next two weeks, a Mumbai-based trader said.