Local Indian hot rolled coil (
HRC) prices have remained unchanged during the past week at around INR 41,000/mt ($675/mt) ex-works, but discounts of INR 500/mt ($8/mt) have been seen on offers in select southern and western regions, traders said on Tuesday, August 19.
"Sentiment in the overall domestic steel market has become bearish following lower-than-expected industrial growth in the last two months. Hopes of a demand uptick in August have been disappointed," a Mumbai-based trader said.
"Dealers in western and southern markets are more inclined to liquidate stocks at discounts rather than conclude fresh purchases," he added.
Market sources said that transaction volumes have fallen sharply as dealers have been cautious about building up inventories and also because of uncertainties over the pricing strategy of domestic steel mills.
For the record, domestic steel mills, which have been expected to announce price increases to offset higher input costs, are yet to take a final decision as they are unsure whether current market conditions will absorb higher
HRC prices.
The source said that base
HRC prices are holding up owing to the high price of iron ore and billets, while any reductions in
HRC prices have mostly been seen from steel distributors.
HRC import offers ranging at $550-560/mt CFR Mumbai from steel mills in Southeast Asia have been rejected by local importers and no significant transactions have been reported during the past week, the sources said.
"Current
HRC import offers with the Indian rupee at INR 61.21 to a dollar have been too expensive for local importers especially with demand remaining sluggish," a trader said.
$1 = INR 60.75