The downtrend in the local Indian hot rolled coil (HRC) has gained momentum with prices shedding INR 1,000/mt ($15/mt) during the past week to INR 42,000/mt ($627/mt) ex-works amid a further weakening of demand and continuing rises in inventories at both dealers and steel mills, traders said on Monday, February 20.
Over the past two weeks, local Indian HRC prices have declined by a total of INR 1,750/mt ($26/mt).
"While the HRC market has been weakening for the last two to three weeks, the margin of the decline during the past week is a matter of concern. Apart from poor sentiment, demand seems to be taking a sharp hit with most end-users staying away from making any fresh bookings," a Mumbai-based trader said.
"Most mills and dealers have been reporting a steady rise in inventories, which is putting pressure on prices. I would expect discounting to start, at least in some regional markets if the current pace of inventory buildup persists," the trader added.
Market sources say that, despite the demand-supply mismatch, local steel mills have been maintaining their base prices unchanged for the current month and reports indicates that base prices are not likely to be changed even for March deliveries by mills.
$1 = INR 66.95