Local Indian hot rolled coil (HRC) trade prices have continued to seek lower levels and have even remained at a discount to the reduced base prices announced by mills for May bookings amid lackluster trading, low end-user demand, and anticipations of further softening of prices, SteelOrbis learned from trade and industry circles on Monday.
Indian HRC trade prices are down INR 500/mt ($7/mt) over the past week to INR 72,500/mt ($943/mt) ex-Mumbai and down INR 800/mt ($10/mt) to INR 71,600/mt ($931/mt) ex-Chennai in the south.
This compares to new base prices announced by mills in the range of INR 74,000-76,000/mt ($962-988/mt) ex-works, after a cut of an average of INR 3,000/mt ($39/mt).
“The steel market is softening week on week in reaction to low procurement by end-users and trade channels being unwilling to commit new bookings as the prices are yet to bottom out,” a Mumbai-based steel distributor said.
“Supply side pressures are expected to rise in line with rising inventories at mills due to lower exports. More market support moves by mills through more base price reductions later in the month are a distinct possibility,” he said.
According to a steel sector analyst with a Mumbai-based financial advisory firm, “There is a divergence of outlook on prices between producers and the market. Mills are looking at prices to recover, banking on China.”
“But many market participants are maintaining a neutral stance. There might even be a contraction in demand as result of input-cost inflation pushing up prices, but elevated prices will further mute demand, leading to recessionary conditions,” he said.
$1 = INR 76.90
