Local Indian hot rolled coil (HRC) prices have hardened over the past week in reaction to large mills pulling back all rebates, volume-based discounts and other incentives to push sales in lieu of a base price increase. However, after an initial boost, trade activity has weakened towards the close of the week without any improvement in the demand outlook, SteelOrbis learned from trade an industry circles on Monday, August 10.
Sources said that trade-level HRC prices have gained INR 300/mt ($3/mt) to INR 56,700/mt ($596/mt) ex-Mumbai and are also up INR 300/mt ($3/mt) to INR 58,000/mt ($609/mt) ex-Chennai in the south.
According to the sources, indications are that large mills have been pulling back sales incentives instead of hiking base prices. The refraining from a base price increase did trigger better trade activity but this fizzled out toward the end of the past week, as buyers returned to need-based procurement since no demand improvement has been evident going forward.
Trade circles said that larger integrated mills over the past week had been offering various incentives of up to INR 800/mt ($8/mt) to get bookings confirmed, but most sellers have withdrawn such sales incentives over the past week, leading to a slight hardening of trade-level prices.
“Market sentiments and activity are now entirely price-driven, as the demand side remains stagnant. It is clear that slack demand will extend well beyond the usual lean monsoon months,” a Mumbai-based trader said.
“Some large mills are expected to announce later this month their schedules for maintenance shutdowns. This could bring some balance from the supply side,” he added.
$1 = INR 95.15
