Local Indian hot rolled coil (HRC) trade prices have lost ground under pressure from the slowdown in the stock movement in trade channels and the rise in cheaper imports, SteelOrbis has learned from trade and industry circles on Monday, May 15.
Even as most integrated mills completed dropping base prices for May deliveries, it was insufficient to trigger any revival in bookings at the trade level as distributors are either fully stocked or cautious in committing fresh bookings in the face of the overall market slowdown.
Sources said that trade HRC prices have lost INR 900/mt ($11/mt) to INR 58,100/mt ($707/mt) ex-Mumbai and are down INR 1,000/mt ($12/mt) to INR 56,000/mt ($681/mt) ex-Chennai in the south.
More among medium and large-scale end-users are seeking import sourcing after ex-China prices dropped further increasing the gap between the landed price of imports and local trade prices.
It has been learned from trade and industry circles that ex-China HRC bookings for end of June-early July shipments were at around $610/mt CFR (INR 50,142/mt) and are still very competitive even after factoring in transportation, logistical costs and local levies, as compared to current local trade prices. This is down from the previous sale at $620/mt CFR reported for ex-China material a week ago.
While definitive import volumes are not readily available, trade circles speculated that at least 50,000-60,000 mt of ex-China HRC have been booked for shipment in early July.
“As trade volumes continue to seek lower levels, even small buyers are bargaining hard and distributors are having to drop prices to conclude bookings. Medium and large consumers are increasingly moving to imports. Vietnam, a traditional importer, has become an exporter and, though not confirmed, we hear reports of several ex-Vietnam offers in the local market,” a Mumbai-based distributor said.
“Base prices of mills are still very high even after price cuts over the past two weeks. Considering that it a now completely a buyers’ market with more import options available, it would not be surprising for local mills to go for another round of price cuts over the next few weeks,” he said.
$1 = INR 82.20