Local Indian hot rolled coil (HRC) trade prices have continued to edge lower during the past week amid sluggish demand and far fewer buyers returning to active business after the recent festival holidays, SteelOrbis learned from trade and industry circles on Monday, November 3.
Sources said that local HRC trade prices have lost INR 100/mt ($1.5/mt) to INR 46,700/mt ($525/mt) ex-Mumbai and are down INR 200/mt ($3/mt) to INR 49,000/mt ($551/mt) ex-Chennai in the south. Sentiment has remained weak. The manufacturing sector is expected to continue to show a sustained slowdown, and, as a result, both traders and industrial users have been largely absent from the market even after the holidays, or at best have resorted only to need-based purchases.
At the same time, the market is awaiting base price signals for November deliveries from mills. But despite the possibility of a hike in the range of INR 750-1,000/mt ($8-11/mt), there has been no indication of market participants committing any fresh bookings ahead of such a hike, indicating a weak demand outlook.
“Current prices are almost at a five-year low. The market is in oversupply from weak domestic demand and low export volumes that are being diverted for local sales. Protectionist measures like the 12 percent safeguard levy have run their course. They cannot support the market in the long term once weak demand cycles become longer,” a Mumbai-based distributor told SteelOrbis.
Notably, import HRC prices for ex-China HRC in India have settled at around $490/mt CFR, for materials under advanced licence. However, according to sources, indicative offers for ex-Russian HRC have been also voiced in the Indian market but at much lower prices as compared to other suppliers or at around $400/mt CFR.
“Mills are facing pressures of margins on the one hand and rising input costs. They are likely to be forced into price increases even at risks of a negative impact on trade conditions. Intermediaries are facing inventory pressures and lot of cash is locked up. There are all round bearish sentiments across market segments,” another source said.
$1 = INR 88.54