Most large Indian mills have announced unchanged local hot rolled coil (HRC) base price for current month deliveries, and so prices have remained at INR 36,750/mt ($512/mt) ex-works, although all steel producers commenced offering significant discounts under pressures of mounting inventories, traders said on Monday, September 9.
Market sources state that compelled by sluggish demand across user industries and rising inventories, almost every large steel mill has commenced offering discounts ranging INR 1,000-1,500/mt ($14-20/mt) instead of lowering their base prices.
“Unsold stocks are weighing down on steel mills. It is across the board discounting in the market and not just linked to volumes,” a Mumbai-based trader said.
“Even market intermediaries are offering discounts to liquidate stocks and manage cash flows,” the trader added.
Manufacturing sector growth is currently at a 15-month low and under the current circumstances no revival in demand is expected from user industries in the short term, while most traders in the market expect local steel mills to lower their base prices next month in addition to discounts.
$1 = INR 71.77
