Local Indian hot rolled coil (HRC) trade prices continued to seek lower levels on combination of weakening industrial demand, sustained liquidity challenges among distributors, early onset of monsoon season and some mills offering discounts after keeping based prices unchanged for June, SteelOrbis learned from trade and industry circles on Monday, June 9.
Sources said that tradable levels for HRC edged INR 200/mt ($2.3/mt) lower at INR 51,100/mt ($597/mt) ex-Mumbai and down INR 100/mt ($1/mt) at INR 52,700/mt ($615/mt) ex-Chennai in the south.
The sources said that most Tier I mill have decided to keep June base price unchanged with at least one large mill reported to be confirming bookings at discount of INR 500/mt ($5/mt) on listed price.
Besides, according to market insiders, industrials have been reducing restocking during monsoon lean season in terms of demand for manufactured goods while trade level continued to face liquidity crisis forcing low fresh bookings.
It was pointed out that buyers were not confirming bookings without extended credit terms beyond the normal 30 days and hence delays in clearing receivable bills was resulting in tighter cash flows, higher borrowing costs and reduction or halt in booking fresh volumes at trade levels.
“The fact that trade prices are falling despite sharp fall in imports indicates fundamental weakness in demand. Some mills which are under maintenance shutdowns are expected to get back to production toward this month end, increasing supply side pressures,” a Mumbai based distributor told SteelOrbis.
$1= INR 85.66