The local Indian hot rolled coil (HRC) market has trended down for the third consecutive week, with prices edging down by INR 100/mt ($1.50/mt) during the past week to INR 34,200/mt ($509/mt) ex-works amid greater fears of rising inventories at both steel mills and dealers, traders said on Monday, July 11.
"With no demand uptick in sight, stocks at steel mills and dealers are reported to be rising, putting more pressure on prices and causing a sharp fall in market activity too," a Mumbai-based trader said.
"A few of the larger steel mills are reported to be offering volume discounts of $10-15/mt but my information is that stocks in the market have continued to increase as neither end-users nor dealers are in the mood to increase off-take," the trader added.
Market sources said that trends indicate several local steel mills like JSW Limited and Bhushan Steel have reported increases of 15-17 percent in HRC production during the April-June quarter and this has further depressed sentiment which were already weak due to high supply in the market.
Market conditions could get more bearish with a number of western Indian dealers considering increasing discounts to liquidate stocks, the sources added.
$1 = INR 67.16