Local Indian hot rolled coil (HRC) prices have slumped by INR 3,000/mt week on week to around INR 35,500/mt ($551/mt) ex-works amid a resumption of discounts and a sharp slowdown in stock movement, traders said on Monday, July 17.
“The negative market conditions can be gauged from the fact that the slide in prices comes in wake of the hike in base prices introduced by Indian steel mills in earlier weeks. This is a clear indication that dealers are sacrificing margins to keep pushing volumes in the market,” a Mumbai-based trader said.
Market sources said that most dealers are offering discounts of INR 1,000/mt in view of the current stock build-up and are absorbing the higher base prices of steel mills.
The sources said that a sharp divergence has emerged between the domestic and export HRC markets over the past week.
For example, while domestic demand is seen to be weakening and dealers are fighting adverse conditions through discounts, large steel mills are better positioned on the back of rising export offers and increased export shipments, the sources said.
They said that HRC export offers ex-India are up $15-20/mt over the past week to the range of around $535-540/mt FOB, benefitting large producer-exporters and leading to a sustained rise in shipments to the Southeast Asian markets.
$1 = INR 64.38