Subdued conditions has prevailed in the local Indian hot rolled coil (HRC) market with tradable prices showing signs of softening amid uncertainty over base pricing of producers next month, SteelOrbis learned from trade and industry circles on Monday, August 30.
Integrated steel mills have maintained their base HRC prices at close to INR 70,000/mt ($940/mt) ex-works, but different voices have been heard in the market over September base pricing.
A section of the market said that integrated steel mills will go ahead of a small hike in base price by about INR 1,000/mt ($13/mt) since the landed price of imports is still at a discount of 12-15 percent. However, another section of market participants are claiming that producers will either maintain price or even consider a small cut, passing on fall in iron ore prices to customers and check the overall falling demand and trading volumes in the market.
In midst of uncertainty over possible base price strategy of producers, distributors are resorting to aggressive stock liquidation and tradable price is heard in the range of INR 66,000-66,500/mt ($887-893/mt) ex-Mumbai slightly lower than INR 66,500-67,000/mt ($893-900/mt) ex-Mumba a week ago.
“Inventories at dealers are on the higher side, and there is a lot of focus on liquidating stocks by distributors amid weak demand situation. Integrated mills are also heard to be offering discounts of INR 1,000/mt [$13/mt] to keep pushing volumes to dealers,” a Mumbai based distributor said.
“The domestic prices will remain under pressure from weakening of demand from end users and fact that no exports has been reported in the last week or so. If mills go ahead with even a modest base price hike for September it will worsen the market conditions further,” he added.
$1= INR 74.44