Official local Indian hot rolled coil (HRC) prices remained stable during the past week at INR 38,200/mt ($503/mt) ex-works, but sharp variations emerged across various regional markets in reaction to different levels of discounts on offer and variable demand, SteelOrbis learned on Monday.
Market sources said that there were wide variations in demand profile across major consuming centers and prices were showing wide variations depending on discounts on offer and also attributing the variation in prices to steel production centers being located in specific geographies like west and east while end use manufacturing plants which were resuming operations during lockdown were predominantly in the north.
Market sources said that HRC prices in around Durgapur market were the lowest at INR 36,500/mt ($481/mt) ex-works net of discount, while in northern regions prices were slightly higher - INR 37,600/mt ($495/mt) ew-works on comparatively lower discounting as demand from end using manufacturers were slightly higher than in other regions.
The sources said that the varied levels of discounting across regional markets had made base price of steel mills largely irrelevant as virtually no trades were concluded at base price and hence local steel mills had not even considered making any official announcements on base price changes for the past two months.
“Discounting has become the norm in the market. This because demand revival is extremely uneven across region and producers’ focus is pushing volumes to liquidate stocks. I would feel that demand during May has improved 20-30 percent over April, but it must be kept in mind that in latter month demand was almost nil and the sequential growth in demand is on extremely low base,” a marketing manager at a steel mill said.
“Almost all integrated steel mills are taking advantage of export opportunities in China, where demand revival has been the fastest to offset weak domestic demand in India, which will continue to remain at low levels for at least two more quarters,” he added.
Exchange rate: $1= INR 75.95
