Over the past week, prices in the local Indian hot rolled coil (HRC) market have continued to remain under pressure for the second consecutive week, decreasing by INR 200/mt week on week to INR 46,800/mt ($641/mt) ex-works, with local steel mills deciding to maintain base prices unchanged for the current month and the market interpreting the reason for this to be a rise in mills’ inventories in view of the volume discounts on offer from select steel mills, traders said on Monday, November 5.
“With most large domestic steel mills announcing that base HRC prices will remain unchanged for November deliveries, there have been reports that some steel mills have revived offers of volume discounts,” a Mumbai-based trader said.
“Clearly over the past few weeks there has been a rise in import competition with an increase in inward volume shipments. The market is seeing the mills’ unchanged base prices as a signal that there is mounting mill-end inventory, and most dealers are waiting for a price correction to gain momentum in order to maintain pricing pressure before concluding fresh deals,” the trader added.
Market sources said that, while Indian manufacturing sector growth in October this year has been positive, the growth has not been evenly distributed across sectors and pessimism over the next few months will continue to put pressure on the market, and both dealers and end-users will likely keep fresh bookings to minimum levels and avoid aggressive restocking.
$1 = INR 73.03