Local Indian hot-rolled coil (HRC) prices have remained largely stable over the past week, but reports of discounted sales suggest excess supply is building amid persistent demand weakness, with trade channels pausing restocking as the festival holidays begin.
Sources said that trade-level HRC prices are stable at INR 49,200/mt ($555/mt) ex-Mumbai and also unchanged at INR 51,000/mt ($575/mt) ex-Chennai in the south. However, some discounted sales at lows of INR 48,000/mt ($542/mt) in the west and INR 49,000/mt ($552/mt) net of discount in the south have contributed to the negative mood and bearish outlook among market participants.
Trade sources said that a demand revival remains uncertain even after the festival holidays end later next month. It has been pointed out that the reforms of the Goods and Service Tax (GST) have not lowered tax rates on steel directly. The rate has been reduced in the case of commodities like cement and other construction materials but any impact or improvement in derived demand for steel from such rate cuts in associated commodities is being ruled out by most market participants.
“Even though the imposition of 12 percent safeguard duty has offered producers some control over prices, despite this the current price is lower by around 4-5 percent compared to last year, indicating that the supply-side control is insufficient support for prices as the sustained weak demand is the fundamental negative,” a Mumbai-based distributor said.
$1 = INR 88.65