Local Indian hot rolled coil (HRC) trade prices have showed a mixed trend and marginal variations amid thin trade activity over the past week, owing to weak demand and oversupply at distributors and producers, SteelOrbis learned from trade and industry circles on Monday, November 24.
Sources said that HRC trade prices have remained stable at INR 46,500/mt ($519/mt) ex-Mumbai and are down INR 200/mt ($2.2/mt) to INR 48,100/mt ($537/mt) ex-Chennai in the south.
According to the sources, both producers and distributors are heard to be carrying excess inventories and to be pushing sales. But trade volumes have continued to remain thin as industrial buyers have been cautious about committing new bookings, while distributors are not restocking owing to already high existing stocks or since they are facing working capital shortages.
It was pointed out that, with current prices close to a five-year low, weak market conditions are expected to be prolonged because of declining exports and mills diverting export allocations to local sales in a market already in an oversupply zone.
“We do not see any immediate recovery in local trade price levels. Industrial demand will remain weak. The impact of the safeguard levy on imports has run its course. In the short term, local prices can only find support if the government offers new and higher levels of import protection to producers,” an official at Steel Authority of India Limited (SAIL) told SteelOrbis.
“The steel industry urgently needs policy-level support from the government. Producers are facing serious challenges from steel prices falling, but raw material prices are not falling proportionately,” he added.
$1 = INR 89.60