Local Indian hot rolled coil (HRC) prices have continued to decline further during the past week amid limited buying during the festival holidays and distributors confirming bookings with additional discounts in order to be able to push volumes into the market and minimize inventory-carrying costs.
Sources said that trade-level HRC prices are down INR 1,000/mt ($11/mt) to INR 48,200/mt ex-Mumbai and have also decreased by INR 1,000/mt ($11/mt), to INR 50,000/mt ($563/mt), ex-Chennai in the south.
However, there are widespread reports of heavy discounting by market intermediaries in order to be able to check inventory rises, with sales being reported at INR 47,400/mt ($534/mt) in western and northern regional markets, the sources said.
“Large industrial users are resorting to need-based purchases. Distributors are struggling to keep stocks moving with aggressive discounting to minimize stock-carrying costs and maintain liquidity on their books. The mood is extremely bearish. Prices are seeking lower levels despite low import competition, indicating fundamental weak demand,” a Mumbai-based distributor told SteelOrbis.
“There is no support forthcoming from producers. They are not passing on the benefits of the slight fall in raw material prices to steel consumers. Some pricing support is necessary to support a demand revival, but we do not see any such signs for mills. Hence, we see further downside risks to prices in the coming weeks,” he added.
$1 = INR 88.76
