The downtrend seen in the local Indian cold rolled coil (HRC) market in the previous two weeks has been checked during the past week, with prices remaining unchanged at INR 41,500/mt ($590/mt) ex-works, but trading activity has fallen to very low levels as pessimism over negative industrial production has gripped market participants, traders said on Monday, May 13.
Market sources said that the most recent government data showing that the index of industrial production for March this year had declined by 0.1 percent, the first negative growth recorded over the past 21 months, has unnerved sentiment.
Over the longer term, the slowdown is becoming entrenched with the index of industrial production during the 12-month period ended March 31 being recorded at 3.6 percent, against 4.4 percent during previous 12-month period, the sources said.
“National elections, the prospects of a hung parliament and political uncertainty had already been taking a toll on trading sentiments. Now, the decline in industrial growth precludes any possibility of an uptick in demand at least in the medium term and market intermediaries are cautious about restocking,” a Mumbai-based trader said.
“A large section of end-users have shifted their focus to imports even for their lower-volume requirements. Domestic HRC producers are refusing to adjust base prices despite the market slowdown,” the trader added.
$1 = INR 70.37