Local Indian hot rolled coil (HRC) trade prices have remained stable over the past week amid weak trading activity and the sustained negative outlook, with buyers waiting for some market support measures in July from large integrated mills, SteelOrbis learned from trade and industry circles on Monday, June 30.
Sources said that trade-level HRC prices are unchanged at INR 50,600/mt ($592/mt) ex-Mumbai and unchanged at INR 52,500/mt ($614/mt) ex-Chennai in the south.
The sources said that demand has continued to remain weak and large industrial users have not been restocking during the current lean manufacturing months of the rainy season. At the same time, a few buyers have been deferring immediate bookings expecting some market support measures from leading producers in July. These expectations of consumers and market intermediaries included the lowering of base prices, extended credit terms, volume-based discounts or a combination of these three, the sources said.
“At the distributor level, very few enquiries are being converted to actual sales unless distributors offer extended credit terms. But the mills are not extending long credit to distributors, and this is creating market distortions with intermediaries bearing the burden of slow movement of stocks,” a Mumbai-based distributor told SteelOrbis.
“A section of the market is expecting a base price reduction of around INR 1,000/mt ($12/mt). But we feel that this is unrealistic. Imports are very low and there is low import competition. Producers are unlikely to forgo margins to support the market. The best hope is for some kind of volume-based discount from mills,” he added.
$1 = INR 85.48