Local Indian hot rolled coil (HRC) trade prices have showed marginal changes over the past week amid steadily declining trade activity as industrial buyers have reduced bookings, with the usual monsoon rains set to usher in weak demand, and overall caution as regards restocking raw materials as inflationary pressures build up across sectors, SteelOrbis learned from trade and industry circles on Monday, June 22.
Sources said that trade-level HRC prices are down by around INR 100/mt ($$1/mt) to INR 56,800/mt ($600/mt) ex-Mumbai and are unchanged to INR 58,300/mt ($615/mt) ex-Chennai in the south.
According to the sources, while much of the low trade activity could be attributed to the setting in of the monsoon season, the market is also under pressure from oversupply both at producers and in distributor channels. It was pointed out that a section of distributors are offering extended credit terms to liquidate stocks instead of upfront discounts, to improve cash flow from business.
“Over and above weak demand and the slowdown in bookings, import pressures are also mounting. Our assessment is that, since beginning of the current month, an estimated 65,000-75,000 mt have arrived at ports,” a Mumbai-based distributor said.
“Large mills have paused any hikes in base prices in June. It will be interesting to see mills’ pricing strategy in July, balancing rising costs of production on the one hand and oversupply on the other,” he added.
$1 = INR 94.30
