The local Indian hot rolled coil (HRC) market has lost ground for the fourth consecutive week with prices edging down by INR 200/mt week on week to INR 44,800/mt ($653/mt) ex-works amid scarce trading activity and mounting expectations of base price adjustments by domestic steel mills next month, traders said on Monday, July 30.
“With stocks rising both at steel mills and dealers and a slowdown seen in stock movement in the market, there is a strong expectation that steel mills will adjust their base prices next month, prompting dealers to postpone any bookings for large volumes,” a Mumbai-based trader said.
“Stray reports received by us also indicate that export orders being booked by large steel mills have tapered off during the past week, indicating that inventory management by HRC producers will be challenging over the next few weeks,” the trader added.
Market sources said that local steel mills are expected to lower their HRC base prices by around INR 500/mt when they announce August delivery prices in the coming week. They said that, if market expectations of lower base prices are belied, traders will have no option but to revive discount offers to liquidate high-price stocks in order to maintain cash flows of trading businesses.
$1 = INR 68.64