The local Indian hot rolled coil (HRC) trade price downtrend has showed no signs of slowing as producers have pushed more volumes for domestic sales in the absence of exports, while at the same time end-users have moved to the sidelines, anticipating a deeper bottom amid rising supply-side pressures and the anticipated June base price reduction to be announced by mills by next week, SteelOrbis learned from trade and industry circles on Monday, May 30.
Indian HRC prices are down INR 3,000/mt ($39/mt) to INR 66,300/mt ($854/mt) ex-Mumbai and down INR 2,500/m ($32/mt) to INR 66,500/mt($857/mt) ex-Chennai in the south.
“Local mills have begun to push higher volumes for domestic sales, responding to the 15 percent export tax and overseas sales drying up. Trade activity is fizzling out as end-users are seeing a deeper bottom as excess supplies will keep prices under sustained pressures,” a Mumbai-based steel distributor said.
“Mills will need to cut June base prices if higher volumes are to be pushed for domestic sales. The market expects a base price reduction of INR 2500/mt ($32/mt) within the next one week,” he said.
A steel sector analyst with a Mumbai-based financial advisory firm said that Indian steel exports were down 22 percent in April 2022, according to government data, and this was before the imposition of the export tax.
Hence, the volume of export allocation diverted for local sales will be further accentuated by the export tax and local prices will remain under pressure, but forecasting a bottom price is a challenge because of the macroeconomic difficulties owing to surging inflation and the tightening of monetary policy by the central bank, he said.
$1 = INR 77.60
