Local Indian hot rolled coil (HRC) trade prices have continued their prolonged downtrend in the past week amid a combination of intensified import competition and the significant demand depression reported from most major industrial users, SteelOrbis learned from trade and industry circles on Monday, June 5.
Trade channels have mainly been inactive amid unclear signals on June base prices of producers, with a cut or a hike anticipated equally by market segments. Sources said that HRC trade prices have slumped INR 1,000/mt ($12/mt) to INR 55,800/mt ($678/mt) ex-Mumbai and are also down INR 1,000/mt ($12/mt) to INR 54,300/mt ($660/mt) ex-Chennai in the south.
Several market participants have confirmed the intensification of import competition with large-volume deals concluded for July-August arrivals, even though there has been some hardening of imported prices but they are still at a discount to current trade prices.
They said that an estimated aggregate of 30,000 mt of ex-Vietnam HRC was booked over the past week at a landed price averaging at $590/mt, while 45,000 mt of ex-China HRC is reported to have been booked for July delivery at $585/mt CFR, slightly higher than deals in the range of $575-580/mt CFR a week ago.
“Imports are very competitive even now. With most industrials working in very a competitive environment, even smaller users are moving to import sourcing to get cost advantages wherever they can. This will weigh heavily on local producers when they take a call on current month base prices,” a Mumbai-based distributor said.
“But in the medium term, the problem of the market is the fundamental demand depression and rising cost of production. Hence, producers’ ability to revive or support the market through pricing is very limited. No trader is willing to restock either amid the sustained slowdown in movement from mill to market,” he said.
$1 = INR 82.30
