Local Indian hot rolled coil (HRC) trade prices have continued to lose ground touching a two-year low amid sagging industrial demand impacted by mounting negative economic indicators, SteelOrbis learned from trade and industry circles on Monday, December 12.
Indian trade HRC prices have slumped INR 1,500/mt ($18/mt) to INR 54,100/mt ($657/mt) ex-Mumbai and are down INR 1,000/mt ($12/mt) to INR 53,800/mt ($654/mt) ex-Chennai in the south.
The sources said that trade price discounts on base prices of mills increased even after the latter cut prices over the course of last week, reflecting the rapid weakening of sentiments and of demand in the market.
“The base price reduction by mills has failed to stem the rapid declines in the market and has not had any impact on improving movement of stocks either at mill or trade levels,” a Mumbai-based distributor said. The HRC base prices in the Indian market have come to INR 54,000-55,000/mt ex-works for December.
“The market is weighed down by a number of negative economic indicators. Industrial users have been impacted by another round of hikes in interest rates by the Reserve Bank of India (RBI) which has increased the costs of borrowed funds by industries. The rising inflow of ex-South Korea and ex-Japan material at an average 10-12 percent cheaper on landed price basis has opened up another competitive front for local producers,” he said.
Producers were, however, maintaining a more positive outlook. “Local prices have touched a bottom and are expected to move up. There are some year-end pressures on the market. But domestic demand is expected to grow 9-10 percent in the fiscal year 2022-23. This will provide support to the market,” an official at Jindal Steel and Power Limited said.
“Of course, with the international market in a surplus zone, a lot of imported material are flowing into India. In November, around 600,000 mt of steel, 80 percent of which were HRC, were imported into the country. We are seeking government protection from rampant inward shipments and support for domestic production and prices,” he said
$1 = INR 82.30