Local Indian hot rolled coil (HRC) prices have declined amid renewed pressures from low demand and falling sales and as select primary steel mills and dealers have cut prices by INR 500-700/mt ($8-11/mt) to the range of around INR 38,500/mt ($622/mt) ex-works, traders said on Tuesday, December 2.
According to a Mumbai-based trader, primary steel mills with integrated raw material sources like iron ore have adjusted their flat steel product base prices, including HRC prices, by around INR 500/mt ($8/mt) for December deliveries.
At the same time, a sharp fall in transaction volumes and a slump in sales have forced dealers to offer another INR 200/mt ($3/mt) discount to keep inventories within manageable levels and to ensure steady cash flow, the trader said.
Market sources said that non-integrated steel mills without captive raw material sources like JSW Steels are also expected to adjust their HRC prices in the coming week as they will be able to pass on the benefits of lower costs of imported iron ore and coking coal to buyers.
Sources said that imported HRC offers have also softened during the week, with ex-CIS HRC declining by $20-25/mt to around $500-510/mt CFR Mumbai.
However, the Indian rupee has hit a nine-month low at INR 62.02 to a dollar and is forecast to weaken further. This has kept import volumes in check but has failed to revive any interest in local HRC, reflecting the inherent bearish trend in the manufacturing sector, the sources added.
$1 = INR 61.91