Local Indian trade hot rolled coil (HRC) prices have entered a new down-cycle during the past week, after the previous brief stability, amid renewed pressures from the rise in mill-end inventory, industrial users pausing restocking in the face of weak demand, and trade channels facing liquidity challenges, SteelOrbis learned from trade and industry circles on Monday, July 14.
Sources said that HRC trade prices have lost INR 600/mt ($7/mt) to INR 50,000/mt ($582/mt) ex-Mumbai and are also down INR 600/mt ($7/mt) to INR 51,900/mt ($604/mt) ex-Chennai in the south. However, a section of traders claimed that most tier-one mills have been confirming bookings at additional volume-based discounts, taking the effective price to INR 49,000/mt ($570/mt).
“As the monsoon rains intensify across the country, depressed demand also gets aggravated in direct correlation. Industrial buyers are deferring restocking, anticipating further declines and the market yet being some distance from a new bottom,” a Mumbai-based distributor said.
“Imports are falling on month-on-month basis since the imposition of the safeguard levy. But there is a lot of supply-side pressure from domestic producers after at least three large mills were brough back into operation over the last two to three weeks after maintenance shutdowns. Discounted sales are getting widespread on rising inventories and falling demand,” he added.
A steel sector analyst with a Mumbai-based financial advisory firm said that trade-level HRC prices face further downside risks of two to four percent until end of September/early October when the monsoon rains abate at the earliest and when the market can expect some kind of recovery.
$1 = INR 86.00