Local Indian hot rolled coil (HRC) prices have come under downward pressure during the past week, softening by INR 200/mt ($3/mt) to around INR 33,500/mt ($523/mt) ex-works amid a demand slowdown and a fall in transaction volumes, traders said on Monday, October 19.
"The decrease in local prices despite reduced import pressure is a clear indication of a demand slowdown and that the market has failed to absorb recent price hikes by local steel mills," a Mumbai-based trader said.
"Transactions volumes have been falling rapidly in the market. Under these circumstances, the greater pricing power of steel mills resulting from import protection has been detrimental to overall market growth and this is reflected in the lack of sustainability of higher price levels," the trader added.
Market sources said that ex-China HRC offers have remained unchanged during the past week at around INR 295/mt CFR Mumbai, for November shipments. However, importers are keen to avoid the 10 percent import safeguard duty and only negligible transactions have been reported in the market.
However, with the Indian rupee recovering to INR 64.80 against the US dollar, any further $10-15/mt reduction in import offers would improve the inflow of imported HRC, sources added.