Ex-India hot rolled coil (HRC) trade prices have remained under pressure over the past week amid muted trade activity and soft demand from industrial buyers, who have been booking only small volumes to meet immediate requirement and who have been cautious as regards building up raw material inventories, SteelOrbis learned from trade and industry circles on Monday, April 27.
Sources said that HRC trade prices have slipped by INR 200/mt ($2/mt) to INR 56,400/mt ($598/mt) ex-Mumbai and are down INR 700/mt ($7/mt) to INR 58,500/mt ($621/mt) ex-Chennai in the south.
According to the sources, with energy price-driven inflationary pressures building up across the economy, industrial users are reducing restocking, anticipating a slowdown in demand. Production costs of steel mills are going up and this is being passed on to consumers. However, consumers are not able to absorb higher input prices as they themselves are facing moderation of sales growth. This naturally results in the slow movement of HRC stocks from mills to the market, the sources said.
“The prolonged war in the Middle East has disrupted global supply chains. Its impact on domestic production is getting bigger every day, triggering cost-push inflation. Rising costs and weakening demand are making market participants cautious and nervous. Cash conservation is a priority and this is reflected in falling trade volumes,” a Mumbai-based distributor told SteelOrbis.
“The bearish market sentiment risks further hits as mills can be expected to continue base price hikes to offset costs. So, the worst is not yet over,” he added.
$1 = INR 93.91
