Mounting forces of correction have undermined the stability in the local Indian hot rolled coil (HRC) market, with prices declining by INR 1,000/mt week on week to INR 44,500/mt ($684/mt) ex-works as dealers were seen to drastically reduce new bookings, indicating that resistance to higher prices was gaining momentum, traders said on Monday, April 2.
“The recent gains in local HRC prices have sharply reduced dealers’ appetite and ability to make fresh bookings and carry inventories,” a Mumbai-based trader said.
“The rapid fall in volumes over the past week has triggered expectations that discounting might re-surface and such hopes prompted several traders to keep fresh bookings to a minimum too,” the trader added.
Some players in the market, however, said that part of the downward trend could also be attributed to year-end considerations and the fact that several dealers had exhausted bank working capital for the year ending on March 31, and would be in a better liquidity position as the new financial year gets underway from this week onwards.
According to two other traders, there have been tentative signals of HRC import transactions in the market and also the possibilities of inward shipment volumes rising have had a bearish impact on local market prices.
The traders that, according to information available in the market in India, commercial importers in the last week of March concluded a transaction of ex-Japan HRC at a price of around $675/mt CFR Mumbai, while another transaction for ex-South Korea HRC was concluded at around $685/mt CFR Mumbai.
Although it is still too early to conclude that these transactions will emerge as a trend, the very fact that import shipments are back after almost zero inward shipments in recent months has created some nervousness over the prospects for domestic HRC prices, the traders added
$1 = INR 65.04