Local Indian hot rolled coil (HRC) sellers have continued to push for discounted sales, while maintain base prices, but sentiments and trading activity have suffered fresh setbacks from the second wave of the pandemic emerging across the country and the renewed imposition of regional restrictions, SteelOrbis has learned from trade and industry circles on Monday, March 22.
The sources said that key manufacturing regions in the west and north are seeing a definitive second wave of the pandemic and local authorities are again imposing restrictions on movement and even locking down badly-hit cities, renewing fears in the market of supply-chain disruptions all over again.
Several market participants said that dealers are staying away from concluding fresh bookings, unsure of how differing regional restrictions being imposed by local authorities will impact the movement of people and goods at a time when pent-up demand from the earlier national lockdown last year had already started to wane, impacting demand for steel inputs from end-user industries.
Sources said that integrated steel mills are still largely maintaining base prices in the range of INR 53,500-55,000/mt ($738-759/mt) ex-works, but most of the limited trades have been reported in the range of INR 52,000-53,500/mt ($717-738) ex-Mumbai net of discount, which means that discounts have increased to INR 1,500/mt ($21/mt) on average compared to INR 1,000/mt ($14/mt) a week ago.
“The new wave of the pandemic has thrown in fresh uncertainties as regards the V-shaped recovery in the manufacturing sector seen until a few months ago, which is now running out of steam. There are no bets on how the market will react to more regions coming under fresh restrictions,” an official with Steel Authority of India Limited (SAIL) said.
“In terms of the pandemic, we are back to where we were in June-August last year. How differently we tackle it this time will determine its impact on manufacturing. Sellers will once again have to factor in extraneous factors other than demand-supply to fix the April base pricing strategy,” he added.
$1 = INR 72.50
