Local Indian hot rolled coil (HRC) prices have remained stable and, even though trade activity has been muted, the market has found support from the expected supply-side tightening, with a few large mills going into maintenance shutdowns over the next two months and lot of talk over base price increases by producers, SteelOrbis learned from trade and industry circles on Monday, May 13.
Indian HRC trade prices are unchanged at INR 53,000/mt ($635/mt) ex-Mumbai and stable at INR 54,000/mt ($647/mt) ex-Chennai in the south. A section of market participant said that as of now trade prices are stable and are not moving up even though mills have announced planned shutdowns largely because of the glut in the market, and lower supplies from mills will not lead to a significant impact on the market.
However, another section maintained that, with some mills shutting down over May and June, other operational mills will leverage the situation to increase flat product base prices, triggering the next uptrend. A few mills have already announced an increase in base HRC prices of around INR 1,000-1,500/mt ($12-18/mt) for May to around INR 54,500-55,000/mt ($653-659/mt) ex-works. However, the fact that trade prices remain at a discount to base prices signals that the market still lacks confidence.
“The market, particularly trade channels, has been hard hit by liquidity which has been drained during the ongoing national elections and the compulsions of election funding. There is price stability largely owing to sentiments and expectations rather than economic fundamentals,” a Mumbai-based distributor said.
“There are big question marks over immediate short-terms trends and no consensus on the demand outlook, prompting market participants to be extremely cautious,” he said.
$1 = INR 83.50