The local Indian hot rolled coil (HRC) market has remained range-bound and prices have been showing marginal movements with trade channels almost inactive while end-use industries are refraining from restocking ahead of the lean monsoon season, SteelOrbis learned from trade and industry circles on Monday, June 19.
Sources said that HRC trade prices have remained largely stable at INR 55,300/mt ($675/mt) ex-Mumbai and INR 54,000/mt ($659/mt) ex-Chennai in the south. At the same time, trade activity is ‘nearly halted’ as the market lacks any direction and market participants have divergent outlooks. A section of trade channels believe that demand will revive with the onset of the monsoon, while others maintained the impact of El Niño will further depress industrial demand.
“The base price reduction by mills earlier this month has had no impact in terms of reviving trade conditions. Trade prices are falling and are still at a deep discount to base prices of producers. So, will mills continue to extend support to the market? This is the question dogging market participants and holding them back from fresh commitments,” a Mumbai-based distributor told SteelOrbis.
“Overseas sales are getting more challenging. A large part of export allocations of mills is coming in for domestic sales. Hence, we expect local trade prices to remain under pressure. Another two to three percent downside risk over the next month is a conservative assessment,” he added.
$1= INR 81.90
