The downward movement of the local Indian hot rolled coil (
HRC) market has continued for the second consecutive week, with prices softening by INR 300/mt during the past week to INR 40,500/mt ($620/mt) ex-works amid persisting concerns over rising inventories and slow off-take from end-user industries, traders said on Monday, March 20.
"
HRC prices have been steadily losing ground amid worsening sentiment relating to demand and concern over the general rises in inventories held by all market participants," a Mumbai-based trader said.
"There is also a lot of uncertainty over possible changes in base prices offered by Indian steel mills. While the mills are citing rising input costs of imported coking coal, they have little opportunity to hike prices without causing a worsening of the situation regarding inventory levels. Hence, dealers are waiting and watching and are unwilling to conclude any significant transactions," the trader added.
Market sources said that
HRC exports from the country are also seen to be slackening as large Indian steel mills are unable to compete with falling Chinese
HRC offers.
The sources said that reports indicate that Chinese
HRC export offers have declined by $15/mt over the past week to levels of around $500/mt FOB China and Indian exporters are not in a position to match such aggressive pricing, compounding fears that inventory levels of mills in
India will not be checked in the short term.
$1 = INR 65.36