In the local Indian flat steel market, silence on the demand side has continued to exert an influence this week. Local Indian mills are observed to be giving discounts of INR 500-1,000/mt in their hot rolled coil (HRC) offers. Local mills' offers for hot rolled coils are currently standing at the price level of INR 28,000-28,500/mt; however, it would be difficult to say that Indian buyers are showing great interest in these offers. Given the sluggishness in the steel markets during summer and the high inventory levels in India, softenings in prices are seen to be a natural result. However, SteelOrbis has heard from market players that there have been slight declines in inventories, which are mostly comprised of Chinese origin import materials. This may be considered a promising development for producers and local traders. The pressure from China on the local market, which had been evident for months, seems to have waned to some extent after the cancellation of the export tax rebate in China.
Ex-China boron-added hot rolled coil offers are heard to be standing at the price level of $600-605/mt CFR. The decrease in purchasing activity from China has reduced the pressure on the Indian flat steel market. Up to one or two months ago, import offers given from China were considerably lower than local mills' offers. However, with the Chinese government's cancellation of the export tax rebate, it can be said that the rapid decrease in Chinese offers has been replaced by a stable trend and even by a slight increase for non-boron-added products.
This week in the local Chinese market, prices of hot rolled coil have registered slight increases due to growing demand. This improvement in the Chinese market, which is being followed closely by all global market players, raises the question of whether export prices will also increase. A good number of market players think they will. SteelOrbis has heard from traders that an increase in Chinese export offers for hot rolled coil would be a welcome development for local Indian mills.
The general opinion in the Indian flat steel market is that buying activity will be on the slow side until inventory levels melt significantly, and then, with a possible increase on the demand side by the end of the summer season, prices will start to climb up.