This week has started with lower local hot rolled coil (HRC) trade prices in India caused by very low trade conditions, a lack of clarity regarding mills’ base price for the current month and the absence of bulk bookings by industrial users.
Sources said that HRC trade prices have softened by INR 200/mt ($2/mt) to INR 55,100/mt ($671/mt) ex-Mumbai and are also down INR 200/mt ($2/mt) to INR 53,700/mt ($654/mt) ex-Chennai in the south.
However, a section of the market maintains a positive outlook, pointing out that the pace of the fall in prices had eased over the past two weeks. Trade channels had stopped restocking for several weeks leading to a drawdown in inventories and could be expected to restart fresh bookings, supporting the market going forward.
Major global markets were also seeing some price stability, which would also be expected to be reflected at the domestic level and factored in while local mills commence announcing base prices for July later this week. “There is a lot of hope that prices may have bottomed out for the current cycle. But, at the same time, any upside will be deferred until the end of the current lean monsoon season around the end of August or early September, when industrial activity gathers pace and bulk bookings resume,” a Mumbai-based distributor said.
“Trade prices will hence remain range-bound. The immediate short-term direction will be set by mills when they announce base prices. Indications are that base prices will generally be maintained as it is too early to attempt an increase without counter-productive risks and triggering a market resistance,” he added.
$1 = INR 82.10