Local Indian hot rolled coil (HRC) prices have edged down during the past week by around INR 500/mt ($8/mt) to INR 35,500/mt ($571/mt) ex-works as dealers have commenced aggressive stock liquidation, traders said on Monday, February 16.
"HRC dealers are unwilling to make fresh bookings or carry high levels of stocks amid several uncertainties which lie ahead," a Mumbai-based trader said.
"The market is concerned over how much the forthcoming federal budget on February 28 will boost the manufacturing sector and is waiting for the government decision on tariff protection for domestic steel mills, and hence dealers have been liquidating stocks and will possibly restock only after positive indicators from the government," he added.
Sources said that most traders have rushed to liquidate stocks, lowering their prices in the face of significant imported HRC transaction volumes during the week.
Ex-China HRC offers have declined further to about $400-450/mt CFR Mumbai for April shipments and a further rise in HRC imports is expected by the market, the sources said.
With the Chinese authorities offering significant tax rebates on HRC exports, Chinese exporters are in a position to reduce their offers further in order to keep pushing volumes into the Indian market.
$1 = INR 62.24