Local Indian hot rolled coil (HRC) prices have continued their prolonged downtrend during the past week, driven by sluggish industrial demand on the one hand, and a buildup of inventories at both dealers and mills on the other, forcing sellers to offer discounts to stimulate sales, SteelOrbis learned from trade and industry circles on Monday, July 21.
Sources said that HRC trade-level prices are down INR 500/mt ($6/mt) to INR 49,500/mt ($574/mt) ex-Mumbai and have lost INR 500/mt ($6/mt) to INR 51,400/mt ($594/mt) ex-Chennai in the south.
According to the sources, mills are offering volume-based discounts ranging up to INR 1,000/mt ($12/mt) for inventory management, while distributors were having to offer extended credit terms to get bookings confirmed even with the challenges of liquidity tightening with longer cash inflows.
“The market mood is deteriorating week by week, with no positive drivers in sight. Industrial buyers are unwilling to restock, as their monthly sales growth remains sluggish. Distributors are also hesitant to replenish inventories - not only is stock moving slowly, but they are also facing significant liquidity challenges. Buyers are not committing unless offered extended credit terms, which is causing a large portion of funds to be tied up,” a Mumbai-based distributor told SteelOrbis.
“Imports appear to be rising despite the 12 percent safeguard duty. Several mills, led by JSW Steel Limited, have approached the government, claiming that importers have found loopholes allowing hot rolled coil (HRC) volumes to enter the market. Vessel data show that approximately 201,000 mt arrived at ports between July 1-12, with another 280,000 mt expected before the end of the month. This influx is likely to renew pressure on domestic prices,” he added.
$1 = INR 86.28