Prices in the local Indian hot rolled coil (HRC) market have declined for the third consecutive week, with prices edging down by INR 500/mt ($7/mt) week on week to INR 41,500/mt ($622/mt) ex-works, amid persistent reports of rising inventories across the market and lower off-take by end-users, traders said on Monday, February 27.
The traders said that the extent of the worsening of market conditions can be gauged from the fact that local HRC prices have lost a total of INR 2,250/mt ($34/mt) over the past three weeks with a matching fall in trading volumes in the market.
"Sentiment is very bad. All market participants, steel mills, traders and end-users, are carrying high inventories," a Mumbai-based trader said.
"Volumes have slowed down further during the past week, as all dealers and end-users are awaiting price adjustments by mills for March deliveries. But I do not think local steel mills will go in for any significant price adjustment given their rising input costs," the trader added.
At least two other traders said that pressures on local prices from rising inventories are also aggravated by the fact that Indian HRC export volumes have declined.
The traders said that Indian steel mills had increased HRC export offers by $15-25/mt to around $510-520/mt FOB but these higher levels have not found any takers during the past week.
$1 = INR 66.72