The correction in local Indian hot rolled coil (HRC) market has gained momentum with losses continuing to mount for the second consecutive week and prices moving down by INR 700/mt week on week to INR 41,800/mt ($605/mt) ex-works, amid low trading activity due to year-end considerations and uncertainty over base price revisions by domestic steel mills, traders said on Monday, April 1.
“With market participants busy closing their books of account ahead of the end of the fiscal year and the bank holidays, trading activity has almost been nonexistent during the past week,” a Mumbai-based trader said.
“The market also does not have any definitive indication of the likely base pricing of local steel mills for the current month. But the bias is towards steel mills maintaining their prices unchanged for current-month deliveries, considering the lack of buying interest from actual users and higher-than -usual inventories,” the trader added.
However, two other traders said that a modest fall in base prices of around INR 500/mt by domestic steel mills could not be ruled out but this would depend on assessments of the inventories they are carrying at the moment.
According to market sources, commercial banks will remain closed on April 1, the first day of the current fiscal year, and market intermediaries can only resume activity once banks reopen and traders get their new working capital approvals from banks, and hence the current lull in trading is expected to continue for a few more days at least.
$1 = INR 69.27