Local Indian hot rolled coil (HRC) prices have remained unchanged during the past week at around INR 41,000/mt ($674/mt) ex-works amid a lack of any significant buying interest and fears of a slowdown in manufacturing demand, traders said on Wednesday, September 17.
Transaction volumes during the week have fallen sharply and neither traders nor actual users have made any significant bookings, two Mumbai-based traders said.
Prices have, however, remained stable in the absence of any reports of significant import transactions either since importers too are wary of concluding shipments and of increasing inventories amid fears of a slowdown in manufacturing, the traders said.
Several dealers in the northern Indian market have persisted with discounts of INR 500/mt ($8/mt), but this too has failed to make any positive impact on transaction volumes, the traders added.
Sources said that market sentiments have been adversely affected by the fall in the index of industrial production (IIP) announced by the government, which would seem to indicate that the anticipated demand uptick will be elusive.
According to the government data released last week, the IIP during July this year fell to a four-month low of 0.5 percent, largely attributed to the dismal production performance of heavy manufacturing sectors.
The sources said that local steel mills will have to revise their pricing strategy since the slowdown will not give them any leeway to increase steel prices, as was being considered up to a month ago to offset the rise in raw material costs.
Although no indications are available yet from the major steel mills, given the low demand coupled with the festival season starting next month, a downward price adjustment is not being ruled out by the market, the sources added.
$1 = INR 60,86