The Indian domestic flat rolled steel market has continued to remain slow in terms of demand. It does not seem likely that local producers can push up their new production prices looking at the current market situation. Inventory levels have increased significantly in line with recent arrivals, following the previous bookings made by traders months ago. Furthermore, the relatively low export activity added to the new product inflow also has the effect of boosting inventories. This situation is putting considerable pressure on domestic flat rolled producers in India.
Domestic producers continue to offer hot rolled coils (HRC) in the market at INR 35,000-35,500/mt ($787-798/mt). Activity in the market is limited except for the long-term contracts with end-users with high steel consumption volumes, in sectors such as automotive, white goods, etc. End-users tend to buy depending on price movements for the moment. There are increasingly fewer stockists buying to build up their inventories in such a market environment.
Ready material in the spot market is offered at INR 34,000/mt ($765/mt) for hot rolled coils. Although still slow, some slight pick-up in trading activities can be indicated as compared to last week. Particularly, there is more activity as regards import offers. As offers from China are found to be on the high side, Indian buyers have increased their interest in Russian and Ukrainian offers. Russian producer Severstal's offers for May rolling hot rolled coils (HRC) are heard at $735/mt CFR, while offers from Ukrainian producer Ilyich are in the range of $700-705/mt CFR. Both offer levels are significantly below the levels offered from China. Some Indian buyers have been positive in their approach to the offers from the CIS, and a deal for Ilyich production material was even concluded last week at $705/mt CFR.
In the Indian domestic market, even though overall demand may not yet be strong, there have been slight signs of a revival as compared to previous weeks. Currently, it seems difficult for the producers in India to increase their prices in view of the high inventory levels and the state of demand. A possible softening in import offers in the coming days may even result in further price cuts by domestic producers.