Local Indian hot rolled coil (HRC) prices have remained mostly stable over the past week, but some sellers have been offering discounts to keep stocks moving. Market participants have maintained a positive outlook attributing the discounted sales to ‘marketing moves’, SteelOrbis learned from trade and industry sources on Monday, August 16.
While integrated steel mills have maintained base priced at around INR 69,000-70,000/mt ($930-943/mt) ex-works, a number of sellers were heard to be offering volume discounts and the sales price level is in the range of INR 67,000-68,000/mt ($903-916/mt) ex-warehouse at the moment. The tradable price is in line with that heard a week ago, though sources said that it is hard to achieve above INR 67,500/mt ($910/mt) ex-warehouse in most cases.
“Discounting is a tool for short-term market variations and not a signal of fundamental weakening. There will be some short-term volatility in prices, but the volatility will be at a higher level. The hot rolled price in the US is around $1,800/mt. Prices in the EU too will rise further as production factors carbon costs into final prices. In comparison, current local Indian HRC prices are still lower,” a source at Tata Steel said.
“Price fluctuations at higher levels are not a concern as per ton realizations remain strong to support the large capex planned by most local steel producers. As a customer-centric company, we are focussed on meeting the requirements of our large customers and periodic discounts is one of them,” he added.
According to a steel sector analyst with a Mumbai-based financial services company, in the April-June quarter HRC prices increased 18 percent and a slight slowdown or a correction in the price in the current quarter is expected, though the outlook remains robust owing to both reviving manufacturing growth locally and price gains in the international market.
$1 = INR 74.20