The four-week long downtrend in the local Indian hot rolled coil (HRC) market has stabilized with prices remaining at INR 39,500/mt ($576/mt) ex-works but trading volumes have remained at very low levels, indicating an overall sluggish demand from the manufacturing sector, traders said on Monday, July 15.
“HRC prices are currently ruling at a year and half low. There is a lot of disappointment in the market from absence of any government fiscal stimulus to revive growth. Without external stimulus to demand, the market does not expect any revival in trading activity in the medium term and most buyers -traders and end users - are observed to be pulling out from making any fresh commitments,” a Mumbai-based trader said.
“The stability in prices observed during the past week might also be elusive as prices are stagnant in mist of hardly any activity. Fresh pressures will emerge as there is still strong import competition and mounting pressures of inventories with steel mills. It is possible that some traders will also start discounting to manage high inventories in the coming weeks,” the trader added.
According to two other sources, the only support that can be expected would be export sales from large domestic steel mills for large volumes which would ease supply side pressures in the local HRC market.
$1 = INR 68.56