Downward pressures have persisted in local Indian hot rolled coil (HRC) market for the second consecutive week, with prices edging down by INR 200/mt ($3/mt) week on week to INR 34,500/mt ($519/mt) ex-works, as the number of buyers has dwindled and amid reports of increased inventories held by dealers, traders said on Wednesday, March 23.
“The fall in appetite among buyers was expected considering the previous hectic booking activity in anticipation of a price increase by Indian mills. However, stocks are still moving slowly at the dealers’ end and so a correction has been seen over the past two weeks,” a Mumbai-based trader said.
“Most local steel mills have completed across-the-board price increases during the month and the market is finally showing signs of resistance as prices moved far ahead of the sluggish demand,” he added.
However, at least two traders said that the market is not expecting steel mills to adjust prices in reaction to resistance from buyers and will maintain current levels unchanged as the end of the financial year on March 31 draws closer.
In fact, the traders predicted that local mills’ HRC base prices will be maintained unchanged in April in the absence of any import transactions, while local mills’ transaction activity in their domestic market has improved by 10-15 percent over the past one month.