Prices in the local Indian hot rolled coil (HRC) market have weakened for the third consecutive week, decreasing by INR 300/mt week on week to INR 45,000/mt ($655/mt) ex-works, in reaction to persistent concerns over high inventories and a bearish outlook, traders said on Monday, July 23.
“Mills are saddled with high inventories and the market expects some base price adjustments next month. Dealers too are carrying higher-than-normal stocks and have been unwilling to make fresh bookings in anticipation of lower base prices next month,” a Mumbai-based trader said.
Market sources said that ex-India HRC export prices have remained at $640-645/mt FOB. However, the fact that no significant transaction has been reported during the past week has aggravated concerns that liquidation of mill-end stocks will take longer than expected and has exerted pressure on local prices.
The sources said that, if the current bearish outlook persists together with high inventories, the market will expect local steel mills to adjust HRC base prices in the range of INR 300-500/mt next month.
They also said that the size of base price adjustments is likely to be on the lower side as Indian steel mills are unlikely to sacrifice much of their margins per metric ton in view of rising input costs.
$1 = INR 68.75