Downward pressures have been observed in the local Indian hot rolled coil (HRC) market for the third consecutive week, with prices losing INR 1,000/mt ($15/mt) during the past week to around INR 30,500/mt ($456/mt) ex-works amid aggressive stock liquidation, traders said on Monday, December 14.
“Local HRC prices have showed gains early in the past week on the back of reports of the government imposing a minimum import price, but improved sentiments have not been sustained,” a Mumbai-based trader said.
“Upsides have failed to hold and prices have once again started to edge down as market expectations of a minimum import price offsetting the overall demand slump are very weak and traders have been seen to be liquidating stocks in a low volume market, resulting in a sharp slump in dealer price levels,” the trader added.
Market sources said that the HRC outlook is negative despite all talks of imminent government controls on imports.
The sources said that, while local steel mills are not expected to adjust their base prices, all reports indicate that inventories at mills are far higher than expected and most domestic steel producers are banking on import suppression rather than on a demand push to hold the current high price lines, thereby impacting sentiment among market intermediaries.
Sources said that India’s ministries of steel and commerce had held several rounds of talks last week to set a minimum import price for at least 30 finished and semi-finished steel products. In fact, the government is also considering making Mundra port in Gujarat the sole inward shipment point for steel products as yet another import restrictive measure.