Local Indian hot rolled coil (HRC) prices have remained under pressure for the second consecutive week, decreasing by INR 500/mt ($7/mt) week on week to INR 29,000/mt ($429/mt) ex-works, while the new import protection measure imposed by the government has failed to boost sentiment, traders said on Monday.
“The negative outlook and the market’s inability to absorb current price levels is indicated by the fact that even the minimum import price (MIP) announced by the government has failed to provide support for HRC prices,” a Mumbai-based trader said.
“Import protection can only have a limited impact when overall demand is weakening. Contrary to what local steel mills claim, domestic steel prices were weakening while imports had already come to a halt well before the imposition of the MIP. Accordingly, it is not just import competition which has been impacting prices,” the trader said.
Market sources said that domestic steel mills have indicated that they will maintain their HRC prices uchanged during the remainder of the current fiscal year ending March 31, 2016, and, with dealers reducing fresh bookings, most mills are carrying high inventories while traders are busy liquidating old stocks.
Some traders have said that they are considering resuming discounts of INR 500/mt ($7/mt) as the end of the current fiscal year draws nearer, to ensure cash on their books.
Ex-China HRC offers have remained stable during the past week at around $320/mt CFR Mumbai, but no transactions have been reported during the past week.