Official local Indian hot rolled coil (HRC) prices have been maintained during the past week at INR 37,800/mt ($499/mt) ex-works, but have continued to show wide regional variations resulting from varied discounting in the market, SteelOrbis learned on Monday, June 15.
According to traders, the negative outlook in the market and the slow movement of stocks from both producers and market intermediaries have been reflected in sharp variations in discounting across regional markets and downticks have been seen in prices in some areas.
Market sources said that discount levels increased in northern regional markets, with HRC prices dipping to INR 37,300/mt ($492/mt) ex-work net of discounts, compared to the discounted price of around INR 37,500/mt ($494/mt) ex-work in the previous week.
However, in the industrial belt along western regional markets, higher discounting has been maintained, with prices ranging at INR 36,900/mt ($486/mt) ex-works, the sources said, the same as last week.
“Most integrated steel mills are not changing base prices in order to have a benchmark for their aggressive export push. However, discounting is the only option to push volumes in the local market,” a steel sector analyst at a Mumbai-based financial services firm said.
“It is significant that major industrial belts in the west and north are also pandemic hotspots and, with some lockdown restrictions still in place particularly in cross border movements, local demand is not expected to revive at least before the second quarter [of the current fiscal year]. HRC prices will not see much downside from current levels. Only different producers will adopt different discount strategies based on plant-level capacity utilizations and compulsions of inventory management,” he added.
$1 = INR 75.80
