Local Indian hot rolled coil (HRC) trade-level prices have continued to move down further over the past week, with buyers reducing bookings as demand weakens, while sellers have lowered prices to cope with the slowdown in stock movements, SteelOrbis learned from trade and industry circles on Monday, May 4.
The sources said that HRC trade prices are down INR 200/mt ($2/mt) to INR 56,200/mt ($592/mt) ex-Mumbai and are down INR 600/mt ($6/mt) to INR 57,900/mt ($610/mt) ex-Chennai in the south.
According to several traders, market participants have been awaiting base price signals for the current month from large mills. A section of the market expects a price hike of around INR 750-1,000/mt ($8-11/mt), given rising production costs, which could further dampen trading activity.
Most large industrial buyers are reported to be reducing fresh bookings only to meet immediate requirements and have been avoiding building up inventories, expecting a demand depression from energy cost-based inflationary pressures across the economy. The resulting slowdown in the movement of stocks has been forcing distributors to drop prices, the sources said.
“Sentiments are extremely bearish and rising week on week. Energy prices are rising as the war in Middle East is being prolonged. This is impacting across every industrial sector. At a time when the demand outlook is negative, industries are cautious about restocking raw materials,” a Mumbai-based distributor told SteelOrbis.
“The negatives in the market will be compounded if mills, forced by rising costs, revise base prices again in May. This will further reduce trade activity, and a vicious pricing cycle will set in,” he added.
$1 = INR 94.82
