After signs of stability, local Indian hot rolled coil (HRC) trade prices have started to show weakness over the past week, with restocking by large industrial users easing quickly and inventories among market intermediaries reportedly rising, SteelOrbis learned from trade and industry circles on Monday, November 17.
Sources said that HRC trade prices have lost INR 200/mt ($2/mt) to INR 46,500/mt ($524/mt) ex-Mumbai and are down INR 700/mt ($8/mt) to INR 48,300/mt ($544/mt) ex-Chennai in the south.
According to the sources, the resumption of restocking seen in earlier weeks ended faster than expected, indicating a limited appetite for building raw material inventories among large consumers and reflecting the overall tepid demand faced by the manufacturing sector.
At the market intermediary level, the sources said that a large number of distributors were unable to offer extended credit terms in view of liquidity challenges and hence are facing a slowdown in stock movement and the resulting rise in inventories is forcing to them to stay away from fresh bookings.
“Optimism over demand and price revival post-festival holidays faded very quickly. In the absence of a fundamental demand uptick, mere improvements of sentiments are not enough to support the market. Trade is holding back fresh bookings not sure of the downside potential from current price levels. Most are awaiting better clarity on the short-term trend,” a Mumbai-based distributor told SteelOrbis.
$1 = INR 88.65