Local Indian hot rolled coil (HRC) trade prices have edged up slightly this week, more on the back of sentiments from expectations of new tariffs to check imports and mills supporting the market by keeping base prices changed for the current month, even as trading volumes have remained minimal from weak demand and the liquidity challenges facing market intermediaries, SteelOrbis learned from trade and industry circles on Monday, December 9.
Sources said that HRC trade prices are up INR 300/mt ($4/mt) to INR 49,000/mt ($578/mt) ex-Mumbai but are mainly the same at INR 50,500/mt ($601/mt) ex-Chennai in the south. However, according to the sources, discounted sales have been reported from major trading hubs like Mumbai at prices of around INR 47,300/mt ($558/mt) net of discount, as some distributors have been liquidating stocks to improve cash on books to tide over liquidity challenges.
Citing trade-level intelligence based on vessel arrivals, trade circles said that, while imports have continued to keep pressures on local prices, the volume of inward shipments eased on month-on-month basis which, coupled with expectations of imminent safeguard duty of 25 percent being talked of in government circles, has offered slight support to the market even though weak fundamental demand has been reflected in low trade volumes.
Vessel data showed that total inward import arrivals in December could be around 230,000 mt, which, though high in absolute terms when viewed against low demand and high inventories at local producers, was lower than inward shipments estimated at 570,000 mt in November.
“The support in the market is more on sentiments and expectations. We do not know how long this will support prices because of the slowdown in manufacturing, weak demand, and distributors being unwilling to commit fresh bookings as small and medium firms are facing tight liquidity in the face of challenges in securing bank credit,” a Mumbai-based distributor told SteelOrbis.
$1 = INR 84.70