Local Indian hot rolled coil (HRC) trade prices have sought lower levels amid a sharp fall in trading activities, following the withdrawal of end-use buyers and with the market awaiting December base price announcements from mills expected early this week, SteelOrbis learned from trade and industry circles on Monday, December 5.
Sources said that there are no clear signals on the direction of base prices for current month deliveries and they could move in either direction, with both expected to have a negative impact on market conditions.
According to the sources, Indian HRC trade prices have lost INR 400/mt ($5/mt) to INR 55,600/mt ($684/mt) ex-Mumbai and are down INR 200/mt ($3/mt) to INR 54,800/mt ($674/mt) ex-Chennai in the south.
Trade volumes are seen to be dropping due to the lack of direction in the market and the lack of unanimity among market participants as regards base price movements.
“A section of the market is expecting base price cuts, while another section maintains that producers bolstered by improvements in overseas sales could either maintain prices or increase them,” a steel sector analyst with a Mumbai-based financial services advisory firm said.
“Either way the market is going to be impacted negatively. It is already under pressure from macroeconomic indicators of inflation, the slowdown in manufacturing growth, and rising bank interest rates. Even a possible cut in base prices is unlikely to mitigate the impact of these factors,” he said.
$1 = INR 81.30
