Local Indian hot rolled coil (HRC) prices have remained stable during the past week at INR 38,200/mt ($509/mt) ex-works, although there have been reports of some integrated steel mills increasing discounts for deliveries after April 14 when the current national lock down could end, SteelOrbis has been informed on Monday, March 30.
With road transport almost at a standstill, end-users have stayed away from new bookings, leading to almost paralyzed trading conditions. Only a few large end-users have concluded small-volume contracts during the past week for delivery after April 14, anticipating that the lockdown would be paused for at least some days, enabling steel mills to complete deliveries during the interim.
Market sources said that at least two steel mills have reportedly increased discounts to around INR 750/mt ($10/mt), but even this has failed to trigger any activity among buyers who have been unsure how to ensure deliveries.
Also, the sources said that most integrated steel mills are expected to lower base prices next month as inventory increases are not being checked even after most private steel producers cut plant capacity utilizations.
“Even after lowering production, most steel mills are facing inventory pile-ups. Pricing for April will be a big challenge. Higher inventories will put pressures on prices. But there are limits to how much base prices can be lowered considering the rise in fixed costs being incurred, coupled with the fall in sales revenues,” a manager at Steel Authority of India Limited (SAIL) said.
“I would feel that the current discounts being offered will be made official by factoring the discount into the base price,” he added.
$1 = INR 75.00
