Downward pressures on local Indian hot rolled coil (HRC) trade prices have increased due to the slowdown in restocking demand, mills pushing higher volumes in the market, and traders moving to the sidelines during the festival season, SteelOrbis learned from trade and industry circles on Monday, October 24.
Indian HRC trade prices have declined by INR 700/mt ($8/mt) to INR 56,300/mt ($680/mt) ex-Mumbai and are down INR 1,000/mt ($12/mt) to INR 57,000/mt ($688/mt) ex-Chennai in the south.
“Trade channels are fully stocked up and unlikely to return for fresh bookings immediately owing to the Festival of Lights and also because of the marked slowdown in demand from manufacturing sectors,” a Mumbai based distributor said.
“Key to the short-term price trend will be mills’ pricing strategy for November. Margins of mills are under severe pressure as is evident from the poor second quarter results of the major steel companies. This would warrant a base price increase next month. But it would also risk a further slowdown in stock movement both from mills and trade channels. It remains to be seen which way mills decide,” he said.
At least two traders said that they have received indications from mills that the latter will go ahead with a modest increase in November base prices by around INR 1,000/mt ($12/mt), as operational costs are rising and realizations falling.
$1 = INR 82.80