Local Indian hot rolled coil (HRC) prices have remained unchanged for the second consecutive week at INR 38,200/mt ($500/mt) ex-works amid dull trading activity. Domestic steel mills have not changed base prices for the current month, while discounts have been maintained amid a lack of any improvements in sentiments from the partial relaxations of national lockdown restrictions from today, SteelOrbis has learned on Monday, April 20.
According to traders, the market does not expect any significant pickup in demand from manufacturing industries as the conditions laid down for resumption of production in low-risk zones will be very limited in their impact. At the same time, lower production and higher exports have prevented further inventory increases at steel mills, giving some support to prices.
Even if some domestic steel mills are located in low-risk zones, they are unlikely to improve capacity utilization levels since most of the distribution and marketing channels will remain inactive, located as they are in high-risk zones in urban areas, the sources said.
Market sources said that most integrated steel mills are seen to be maintaining discounts at INR 500/mt ($7/mt), but fresh bookings by end-users and dealers have remained low. While trading major trading hubs across regions like Mumbai in the west and National Capital Region (NCR) in the north have continued to remain under strict lockdowns as high-risk zones, a number of traders and end-users in other regions have stayed away from the market, anticipating that steel mills will have to lower base prices whenever manufacturing and economic activities improve.
However, some sources said that local HRC suppliers have been able to maintain prices and discounts have not widened largely owing to aggressive exports concluded by them over the past week, which have eased pressures from mounting inventories on prices to a large extent.
$1 = INR 76.45
