Local Indian hot rolled coil (HRC) trade-level prices have entered a new downcycle over the past week, triggered by a combination of bearish pressures including the delayed demand revival from prolonged monsoon rains, ample inventories at producers and intermediaries, and market participants starting to retreat with the festival holidays starting in a week’s time.
Sources said that HRC trade prices have lost INR 300/mt ($3/mt) to INR 49,200/mt ($558/mt) ex-Mumbai and are down INR 400/mt ($4.5/mt) to INR 51,000/mt ($578/mt) ex-Chennai in the south.
According to sources, several market intermediaries had restocked aggressively ahead of the base price revisions of mills, but the increase in listed prices was modest, leaving distributors with large inventories. These stocks were putting pressures on the price line as the demand revival has been pushed back with sustained rains and floods across northern and some eastern states.
“The impact of the safeguard duty on steel imports is wearing thin. While it has checked supply-side import pressure, in the absence of a fundamental demand improvement the high local supplies are pushing trade into a negative zone,” a Mumbai-based distributor told SteelOrbis.
“The long festival holidays starting from the coming weekend will result in further lacklustre trade conditions, with buyers mostly absent from the market. The market still has some downside risk, which is assessed to be around INR 500/mt ($6/mt) in the short term,” he added.
$1 = INR 88.19
