Local Indian hot rolled coil (HRC) prices moved down by INR 500/mt ($8/mt) during the past week to INR 41,000/mt ($639/mt), ex-works, amid depressed market conditions, traders said on Monday.
“The correction and weakening of prices has been expected as prices had risen too fast last month even without any uptick in demand,” a Mumbai-based trader said. “Dealers have been carrying high inventories and are now forced to lower prices to keep pushing volumes to maintain cash flow and avoid carrying costs,” he added.
Sources said that there are no pricing signals for the current month yet from steel mills, which has also contributed to the muted market activity.
At least two other traders said that Indian steel mills are unlikely to lower base prices in response to weak demand and at best will maintain base prices unchanged for the current month. They said that, in view of such a possibility and with dealers carrying large stocks, dealers are expected to revive discounts which could be up to $8/mt.
Most dealers are expected to commence discounting from the second week of the month, once the steel mills announce HRC prices for the current month, the two traders added.
$1 = INR 64.18