Local Indian hot rolled coil (HRC) trade prices have continued to lose ground amid a simultaneous slowdown in both domestic and overseas sales, with distribution channels also refraining from committing fresh bookings, anticipating new May price announcements from mills and the possibility of the emergence of discounting against the backdrop of the market slowdown, SteelOrbis learned from trade and industry circles on Monday, May 2.
Indian HRC trade prices are down INR 900/mt ($12/mt) to INR 73,000/mt ($955/mt) ex-Mumbai and down INR 500/mt ($7/mt) to INR 72,400/mt ($948/mt) ex-Chennai in the south.
“Trade circles are expecting some kind of discounting to emerge in mill sales in view of the market slowdown and negative sentiments. Globally, prices are soft and the expected rebound has not materialized largely due to the negative outlook for finished steel prices in China,” a Mumbai based steel distributor said.
“Base price hikes in May by mills do not seem a possibility. But that alone will not reverse negative sentiments. Only strong discounts can prompt trade channels to restock. End-use buyers too are cautious and are working on low inventories amid the overall demand recession for steel products,” he said.
At least two other traders maintained that any market support initiative would need to come from mills. While a base price cut is unlikely, the market expects discounting as a tool to drive trade activity. Discounting was ruled out by traders claiming high costs of funds and rising logistical costs, which precludes small and medium-sized distributors from resorting to discounts to push sales.
$1 = INR 76.40
