Local Indian hot rolled coil (HRC) trade prices have remained stable, but negative sentiment prevailing in the market has reflected a slowdown in stock movement across the supply chain, with industrial consumers resorting to only need-based bookings amid mounting inflationary pressures and a bearish demand outlook, SteelOrbis learned from trade and industry circles on Monday, May 18.
Sources said that the HRC trade price was stable at INR 57,100/mt ($594/mt) ex-Mumbai and also unchanged at INR 58,900/mt ($613/mt) ex-Chennai in the south. However, some reports coming from the southern regional market suggested that some large distributors were offering discounts of around INR 500/mt ($5/mt) amid rising inventories.
According to trade circles, while the market has not yet shown any resistance to recent base price hikes effected by large mills, the pessimistic outlook was reflected in buyers significantly reducing booking volumes, as energy-price-driven inflationary pressures across industrial segments risked demand depression.
“Most market participants are on wait and watch. But in our assessment, prices will come under pressure with the government announcing austerity measures in response to the prolonged war in the Middle East and energy supply disruptions. A price correction is imminent,” a Mumbai-based distributor told SteelOrbis.
“Cost push, inventory pile-up and declining exports are several negative indicators that will continue to impact the market in the medium term. There are no positive drivers. It is a matter of time before trade prices start to seek lower levels as the mood is getting very bad,” he added.
$1= INR 95.88
