The local Indian hot rolled coil (HRC) market has continued to lose ground for the third consecutive week with prices moving down by INR 500/mt week on week to INR 41,000/mt ($576/mt) ex-works to touch a one-year low, with the market expecting domestic steel mills to adjust prices next month and also due to higher import competition, traders said on Monday, January 28.
“The market is expecting domestic steel mills to adjust their base HRC prices for February deliveries. However, a lower base price next month is still not a certainty because the steel mills will be cautious about sacrificing margins as this would impact revenues as the current fiscal year draws to a close,” a Mumbai-based trader said.
“Even with weak trading conditions, end-users are observed to be increasing bookings of import volumes, putting local prices under fresh pressure amid an all-round increase in inventories among all market participants,” the trader added.
According to market sources, dealers are largely seen to be limiting fresh bookings to negligible volumes and prefer to wait and watch the government place its national budget before parliament next week, which could signal whether the government is willing to increase spending to tackle the slowdown in manufacturing sector growth.
$1 = INR 71.17