In the local Indian hot rolled coil (HRC) market, prices have softened for the second straight week, losing INR 700/mt ($10/mt) week on week to INR 34,300/mt ($510/mt) ex-works, with steel mills starting to offer discounts amid high inventories, traders said on Monday, July 4.
“Forces of correction have been gaining momentum in the market and the downward price movement was expected as there are a lot of stocks at both steel mills and dealers,” a Mumbai-based trader said.
“Several large steel mills have begun to offer discounts as they started the current month with very large inventories. Traders have also been quick to adjust their prices and pass on discount benefits to end-users,” the trader added.
Market sources pointed out that local HRC prices, after showing little movement for around five consecutive weeks, have shed INR 1,200/mt ($18/mt) in the course of the last two weeks, reflecting depressed demand, low off-take by end users and a negative outlook in the medium term.
The sources said that, even after the significant fall in prices, most dealers are postponing fresh bookings anticipating that steel mills will be forced to adjust base prices later in the month to maintain their stock liquidation strategy.