Indian hot-rolled coil (HRC) prices rose this week on increased buying activity amid market talk about large mills planning a sharp price hike in the near term.
"Most integrated mills have signalled a price increase in the first week of January. Buyers are stocking up to avoid these higher prices," said the sales manager of a Mumbai-headquartered mill.
There is also a shortage of HRC at secondary producers, as mills are using more of their HRC production as a substrate for coated products as demand for these remains robust.
Stockists and retailers are building inventories to meet demand during the Hindu festival of Sankranti when market participants are likely to be away from 10-17 January.
The Argus weekly assessment for HRC with 3mm thickness increased by 500 rupees/t to Rs36,000/t ($505/t) ex-Mumbai. Offers by major integrated mills this week were at Rs36,750-36,000/t. A deal for 500t of HRC with 3mm thickness was concluded at Rs36,000/t ex-Mumbai.
Indian steelmakers are also seeing higher profit margins for HRC in export markets, making them less willing to offer discounts in domestic markets.
Increased exports of Indian re-rolling grade HRC to Asian markets have led to lower availability of thinner gauge HRC for domestic galvanising requirements, said the manager of a Delhi-headquartered mill.
Domestic coated steel prices were also higher this week.
Offers for galvanised sheet of 0.80mm thickness with zinc coating of 100-120 grams/square meter (gsm) were higher by Rs1,000/t at Rs47,000/t ex-Mumbai. Galvanised sheets of similar thickness with lower zinc coating of 80-90gsm were offered at Rs45,000/t. A deal for colour coated sheet with 0.5mm thickness and 120gsm zinc coating was done at Rs54,500/t ex-Delhi.
