Local Indian hot rolled coil (HRC) prices have edged down by INR 200/mt ($3/mt) over the past week to INR 38,000/mt ($503/mt) ex-works, even though a sharper fall has been noticed in a few regional markets, as end-users awaited cues from states as the Indian government announced a phased commencement of the lifting of lockdown restrictions, SteelOrbis learned on Monday, June 1.
According to the traders, state governments have been delegated greater powers to decide on the levels of lifting of restrictions and this will result in differential levels of resumption of manufacturing depending on plant locations, and hence manufacturers are unlikely to rush to book inputs as they assess situations at their plant locations.
The expected variations in resumption of manufacturing from region to region have also impacted HRC prices, which have showed sharp variations at various manufacturing and trading hubs. In Durgapur in the east, HRC prices are far lower, at INR 36,000/mt ($476/mt) ex-works net of discounts, down INR 500/mt ($6.6/mt) compared to last week.
In northern Indian markets, HRC prices have been quoted at around INR 37,400/mt ($495/mt) ex-works net of discounts, market sources said, down INR 200/mt ($2.6/mt) over the week.
“Most integrated steel mills are offering discounts to push volumes in the market. But discounts are being kept conservative and instead steel mills are focusing on exports to keep inventories and cash flows positive as demand in the local market will not see any dramatic revival for at least two quarters from now,” an official at one steel mill said.
“Sentiments are very low after the government announced 3.1 percent growth in manufacturing during the fourth quarter (January-March 2020), the lowest in 11 years. The worst is yet to come considering that the national lockdown was announced only in the last week of March and its full impact will be felt in the first quarter of the current fiscal year. Hence, we do not see any possibility of a V-shaped recovery in steel demand and trades in the near future in the domestic market,” he added.
$1 = INR 75.60
