India steel: HRC prices up on stockbuild

Indian hot-rolled coil (HRC) prices increased this week, with trading firms gradually restocking inventories after weeks of subdued demand.

"Traders are now placing orders to replenish inventory pipelines that have nearly dried up," said a sales manager at JSW Steel. Trading firms faced weak demand throughout the monsoon months of June-October and reduced inventories to a minimum.

An increase in construction activity is encouraging trading firms to stock up HRC in anticipation of higher demand from the manufacturing sector.

Indian steel mills raised offers for early November by 500-700 rupees/t ($7-10/t), in response to bullish sentiment. But downstream demand is yet to pick up as buyers are wary of higher HRC prices.

The Argus-assessed price for HRC 3mm increased this week by Rs 250/t to Rs34,000/t, ex-Mumbai.

Offers by main integrated mills this week were about Rs34,500-34,750/t, while bids remained low at Rs33,500/t. A small quantity of about 350t was bought by a trading firm in north India for Rs34,000/t this week.

An increase in construction activity followed by renewed public spending in resulting in an increase in rebar orders from developers of public infrastructure projects and building of residential housing projects. Domestic rebar prices increased by Rs500/t in November to Rs32,500/t. This is likely to have a spillover effect on domestic HRC prices, said a trader based in Mumbai.

An increase in domestic demand also lifted Indian export offer prices sharply this month. An Indian mill sold SAE1006 grade HRC at $442/t cfr Vietnam yesterday, while offers for Indian HRC cargoes of this grade were at $450/t cfr Vietnam. Deals and offers for Indian SAE2006 cargoes were at $410-415/t at the end of October.