Local Indian hot rolled coil (HRC) prices have continued to seek lower levels during the past week, with most buyers on the sidelines, deferring any fresh commitments in reaction to the overall slowdown in manufacturing, and with major producers reporting higher-than-average inventories, SteelOrbis learned from trade and industry circles on Monday, July 20.
Sources said that trade-level HRC prices are down INR 100/mt ($1/mt) to INR 56,500/mt ($585/mt) ex-Mumbai and are also down INR 100/mt ($1/mt) to INR 57,800/mt ($599/mt) ex-Chennai in the south.
According to the sources, sentiments have been taking hits from the slowdown in manufacturing and the resultant low demand on the one hand and from rising inventory and oversupply across the supply chain on the other.
Since it is fundamentally a demand issue currently affecting the market, even the reduction in base prices announced by mills has failed to have any positive impact on trading activity, the sources said.
“The fundamentals of the market are so weak that market participants are maintaining a bearish outlook even beyond the current lean monsoon season months. With no recovery in sight, users and distributors are unwilling to restock,” a Mumbai-based distributor said.
“Margins for market intermediaries and producers are under strain as even small-volume bookings can only be confirmed at discounts or with extended credit terms,” he added.
$1 = INR 96.41
