Local Indian hot rolled coil (HRC) trade prices have remained range-bound with a negative bias over the past week, as the market has lacked direction and there is pessimism over the prospects for any demand uptick in the coming weeks, SteelOrbis learned from trade and industry circles on Monday, September 8.
Sources said that HRC trade prices have lost INR 500/mt ($6/mt) to INR 49,000/mt ($556/mt) ex-Mumbai, but are unchanged at INR 51,000/mt ($579/mt) ex-Mumbai in the south.
Notably, market participants have been revising demand expectations downward for the usual post-monsoon demand revival. They said that monsoon rains and floods in several parts of the northern region and sluggish growth reported in several manufacturing sectors have been causing pessimism and declining trade volumes in the market.
The unusual extended monsoon season has also created labor shortages in affected regions, forcing market intermediaries to defer restocking amid overall oversupply in the market, resisting any upside movement in trade-level prices.
“There is no momentum in the market because there is no positive driver ahead. The recent government move to reform the indirect tax structure will not have any direct impact on the finished steel sector as the rate of tax remains unchanged at 18 percent. Lowering of the rate in other sectors holds potential to revive demand across the economy, but any positive from that will come with a lag period. Hence, we expect trade HRC prices to remain range-bound,” a Mumbai-based trader told SteelOrbis.
“There is lot of volume floating in the market. So, if the current low trade volumes persist, there are risks of renewed discounted selling by intermediaries,” he added.
$1 = INR 88.15
