The previous stable trend of the local Indian hot rolled coil (HRC) market proved to be short-lived with prices falling by INR 700/mt during the past week to INR 40,800/mt ($617/mt) ex-works amid pressure from mounting stocks across the market, traders said on Monday, March 13.
"The one week of price stability early in the month was short-lived as prices once again came under pressure as both steel mills and dealers reported a continuing rise in inventories and a further slowdown in off-take from end-users," a Mumbai-based trader said.
"It had been thought that prices may have bottomed now, but now sentiment in the market has become very negative. With no signals from steel mills of any move to adjust March delivery prices, dealers are staying away from making any fresh bookings, resulting in low market activity," the trader added.
Market sources said that, as seen early in the month, dealers in certain regions like the western and southern markets in India have persisted with discount offers of around INR 500/mt as inventories in these markets are reported to have worsened the most.
The sources said that large domestic steel mills are facing stiff Chinese competition in shipping HRC overseas. They said that most mills, with HRC export offers in the range of $510-520/mt FOB, are seen to be retreating from the export markets, unable to engage in price competition with Chinese HRC exports, and this is expected put further pressure on local prices from the supply side.
$1 = INR 66.16