Local Indian hot rolled coil (HRC) trade prices have continued to extend losses amid rapid inventory liquidation by trade channels and even several signals from mills of imminent March hikes in base prices have failed to trigger any fresh restocking either by trade or end-users, SteelOrbis learned from trade and industry circles on Monday, February 20.
Indian HRC trade prices have lost INR 1,500/mt ($18/mt) to INR 58,300/mt ($704/mt) ex-Mumbai and are down INR 500/mt ($6/mt) to INR 58,000/mt ($700/mt) ex-Chennai in the south.
However, traders maintained that the downtrend in prices would be short-lived and prices will start to gain ground as most integrated mills have already informed their distributors of early March increases in base prices responding to the rise in ore, energy and coking coal prices and that HRC trade prices will reverse the falling trend largely caused by stock liquidation by market intermediaries.
“The flat product market is being driven by producers’ aggressive pricing. We do not see much change in demand patterns across users or intermediaries, and, even if trade prices firm up responding to base price increase, we are going to see an extended phase of low trade activity,” a Mumbai-based distributor said.
According to a steel sector analyst with a Mumbai-based financial advisory firm, “The x-factor in short-term price forecasting remains the impact of imports.” He said that, while imports have eased slightly since last month, the landed price of ex-China HRC is almost on a par with current trade prices and it is still not clear whether the further increase in base prices by local producers will trigger higher import bookings by user industries.
The analyst said that domestic steel mills are fully aware of import competition as reflected by the recent petition to the government by the Indian Steel Association (ISA) representing steel companies, seeking tariff protection against imported flat steel products.
$1 = INR 82.80
