Local Indian hot rolled coil (HRC) trade prices have showed mixed trends as attempts by traders to push up prices failed on the back of a combination of the poor demand outlook and continued pressures from cheaper imports, SteelOrbis learned from trade and industry circles on Monday, November 28.
Indian trade channels attempted last week to increase prices by INR 200/mt ($2/mt) to INR 56,200/mt ($689/mt) ex-Mumbai, but rolled back the increase in the face of falling volumes, to INR 56,000/mt ($686/mt) ex-Mumbai, unchanged from the level a week ago.
However, trade prices lost INR 750/mt ($9/mt) to INR 55,000/mt ($674/mt) ex-Chennai in the south.
“Negatives of import pressures, low end-use demand and uncertainties over the December base prices of mills have all outweighed any positive from the withdrawal of export tax on steel. There is near-unanimity in the industry that the withdrawal of the tax will not have any short-term positive for domestic mills amid the global demand recession,” a steel sector analyst with a Mumbai-based financial advisory firm said.
“End-use and trade channel buying is increasingly focused on ex-Japan and ex-South Korea sourcing. On landed price basis, price competitiveness of imports over domestic trade prices has increased from the range of 5-7 percent in early November to 10-12 percent as overseas sellers are extremely aggressive in pushing volumes in India, which is still showing some positive growth in consumption compared to other Asian markets,” he said. In addition to Japanese and Korean suppliers, there were also sizable volumes sold by Vietnam to India.
According to a senior marketing official at a private mill, the local December base price assessment will prove to be critical as it will depend on number of negatives.
“We do not see many changes in minimal export allocations for the current fiscal which will offer headwinds to attempts to increase base prices. The export tax rollback in unlikely to help. Indian HRC base prices have fallen 20-22 percent since April, while the EU prices for example are down around 40 percent. Overseas sales will remain a big challenge. Hence compulsions to force higher sales locally will possibly even point towards a base price reduction next month,” he said.
$1 = INR 81.60