Downward pressures in the local Indian hot rolled coil (HRC) market have increased during the past week with prices moving down by INR 650/mt ($9/mt) to INR 34,850/mt ($492/mt) ex-works, even as trading activity fell sharply with buyers unwilling to make fresh bookings with the long holidays approaching, SteelOrbis has learned.
“Buyers, both intermediaries and end-users, have been virtually absent from the market during the past week. With festival holidays approaching from later this week, buyers are in no mood to lock up funds in fresh bookings,” a Mumbai-based trader said.
“Financial rating agency has further lowered Indian steel demand growth to four percent during the current fiscal year, from the six percent forecast earlier. This too has impacted sentiments and triggered a withdrawal of buyers from the market,” the trader added.
There is too much material available in the market and local steel mills’ inventories are steadily mounting particularly in view of weak domestic buying and the slowdown in Southeast Asia.
Market sources said that most large domestic mills have commenced offering across-the-board discounts of around 10 percent, replacing earlier volume-based discounts, indicating pressures from mounting unsold stocks.
Indian mills are likely to cut base prices for October by INR 1,000-2,000/mt ($14-28/mt), according to sources.
$1 = INR 70.83