Local Indian hot rolled coil (HRC) trade prices have recorded marginal losses in low trading market conditions, but discounts of traded prices compared to base prices have widened after mills increased listed prices of flat products during the past week, SteelOrbis learned from trade and industry circles on Monday, April 3.
Indian HRC trade prices have slipped INR 100/mt ($1/mt) to INR 59,900/mt ($729/mt) ex-Mumbai and are down INR 200/mt ($2/mt) to INR 58,800/mt ($715/mt) ex-Chennai in the south.
Local mills increased base prices by INR 1,000/mt ($12/mt) over the past week, but trade channels are reported to be offering material at a discount in view of stock pile-ups and dealers deferring fresh bookings in view of the bearish demand outlook.
The base prices of the mills for April were settled at INR 61,750-62,500/mt ($751-760/mt) ex-works, making the gap with trading prices to widen to INR 1,850-2,600/mt ($22-32/mt) at least.
“Domestic HRC prices have been somewhat de-coupled from local demand-supply dynamics. Mills are pushing for higher prices largely on strong sales in overseas markets, leading to stronger resistance from local trade and end-users,” a Mumbai-based distributor said.
“We do not think there is much leeway to continue discounted sales beyond current levels. Trade channels will be forced to increase prices as new lots are delivered from mills. But what will happen is a further fall in the movement of stocks as end-users are not willing to commit large funds in building raw material inventories,” he said.
However, producers are not heard to be overly concerned over the market slowdown. “The increase in flat product base prices has been very conservative. A second base price revision cannot be ruled out in April considering much of the recent increase in iron ore and coking coal prices is yet to be passed onto to consumers,” an official at a private mill said.
$1 = INR 82.20