Local Indian hot rolled coil (HRC) trade prices have remained stable over the past week, but steadily thinning volumes and a weak demand outlook persist as the lean monsoon season sets in, SteelOrbis learned from trade and industry circles on Monday, June 15.
Sources said that HRC trade prices are stable at INR 56,900/mt ($597/mt) ex-Mumbai and are unchanged at INR 58,300/mt ($611/mt) ex-Chennai in the south.
According to the sources, both distributors and large industrial end-users have been sharply reducing booking volumes ahead of the usual slowdown in industrial activity and demand during the monsoon rainy season.
Large mills have also hit a pause in hiking base prices despite rising costs, indicating a surplus in the market and strong risks that any base price hike could trigger strong buyer resistance, aggravating inventory pressures further, the sources said.
A section of market intermediaries claimed that a few large mills have commenced volume-based discount offers, aiming to check mounting inventories, but the extent of any discounts could not be confirmed from producers.
“The mood in the market ranges from cautious to extremely bearish. Not only are there no positive drivers seen ahead, with the onset of the monsoon season, coupled with energy price-driven inflationary pressures, the demand weakness can only get worse and this is reflected in low trade activity in the market,” a Mumbai-based distributor said.
“Import pressure is also mounting with rising arrivals of ex-China shipments. Our rough estimate is that around 40,000-50,000 mt arrived at ports during the first two weeks of th ecurrent month and with an estimated 120,000 mt coming in before the end of June. This will continue to put additional pressures on local prices,” he added.
$1 = INR 94.92
