Downward pressures have continued for the second consecutive week in the local Indian hot rolled coil (HRC) market, with prices softening in the past week by INR 400/mt ($6/mt) to INR 32,800/mt ($491/mt) ex-works, with reports of rising inventory at local steel mills continuing to trickle in and expectations of price corrections having yet to run their course, traders said on Monday, August 1.
The traders pointed out that local HRC prices have lost a total of INR 2,200/mt ($33/mt) over the course of the past four weeks, indicating a mounting negative outlook and a sharp fall in demand and transactions volumes in the market.
"Traders are avoiding fresh bookings as they await new price lists from steel mills for August deliveries," a Mumbai-based trader said.
"At the same time, even reports that the minimum import price (MIP) is likely to be extended for another six months after its slated expiry at the end of August have failed to provide any support against the mounting negative outlook on the demand side," the trader added.
According to at least two other traders, although the market expects base price adjustments by the steel mills, the market does not have any clear indication of the margin of adjustments likely from the mills.
$1 = INR 66.77