Local Indian hot rolled coil (HRC) prices have been maintained at around INR 40,500/mt ($671/mt) ex-works amid low volumes as buyers have reduced their transaction activity in expectation of downward price adjustments next month, traders said on Tuesday, April 29.
According to a Kolkata-based trader, buyers have remained cautious during the past week, resulting in low transaction volumes in the market.
There is a lot of oversupply in the global markets which has been putting pressure on prices. At the same time, the cost base of Indian steel mills has changed with falling international prices of coking coal and the stronger Indian currency, and the markets feel that it is only a matter of time before Indian HRC producers adjust their prices to reflect lower production cost structures, the trader said.
The market has been expecting a minimum price cut of around INR 500/mt ($8/mt), but a section of the market considers that the steel mills will not make a call on pricing before June, the trader added.
However, some sources said that demand for flat products may be expected to be volatile during the next two to three months owing to the results of the Indian national elections in May followed by the onset of the monsoon rains.
Local steel mills could be expected to postpone price adjustments in view of such demand volatility, the sources added.