Lack of interest from buyers in local Indian HRC market

Local Indian hot rolled coil (HRC) prices have remained stable during the past week at around INR 40,500/mt ($686/mt) ex-works amid a lack of interest as steel mills and buyers have been focusing their attention on long products, traders said on Tuesday, May 27.
 
"There is little interest in flat products in the market and hence transaction volumes for HRC have remained at low levels," a Mumbai-based trader said.
 
"The long products market is stealing all the limelight, riding on expectations of a rapid hike in government spending on infrastructure and construction. In contrast, flat product consumers like the auto sector which are facing a huge demand squeeze are not so sure of any boost from the government," he added.
 
"Traders and actual users are rushing to restock rebar, prices of which have surged by as much as INR 4,000/mt ($68/mt) in several regions over the past one month. Flat products are not in focus in the market," he said.
 
Sources said the markets have been disappointed by steel producers' deferring the downward adjustment of HRC prices for two consecutive months and failing to pass on the benefits of lower imported coking coal prices and thus boost persistent depressed demand.
 
Buyers are now skeptical of any HRC price adjustment in June since most steel mills have been citing a shortage of iron ore, following the court-directed closure of 26 mines in the eastern Indian province of Orissa, the sources said.
 
The market is now banking on low international prices and the appreciating rupee to increase import competition and force local steel mills to consider lowering their HRC prices, the sources said.
 
Under the current circumstances, local HRC prices are expected to move sideways within a very narrow range in the short term, the sources added.