Local Indian hot rolled coil (HRC) traded prices have sought lower levels during the past week as declines in offers and deals overseas weighed in on domestic mills with the prospects of rises in inventories and the possibility of deferment of base price increases as planned earlier by producers, SteelOrbis learned from trade and industry circles on Monday, April 18.
Indian trade HRC prices are down INR 1,000/mt ($13/mt) to INR 75,900/mt ($999/mt) ex-Mumbai and down INR 2,000/mt ($26/mt) to INR 75,400/mt ($992/mt) ex-Chennai in the south.
“Local market sentiments have been hit by mills lowering offers for overseas sales, and deals are also slowing down. In view of this, the market expects mills to defer April base price increases, and hence market intermediaries are going slow on fresh bookings,” a Mumbai-based distributor said.
“End-users are also seen to be reducing new bookings forcing dealers to lower prices. Since early this year, robust exports have been providing support for prices and enabling mills to compensate for rising input costs. But with exports weakening, sluggish domestic demand will weigh more on trade prices. We expect HRC prices to remain range-bound in the medium term in the absence of an imminent demand revival,” he said.
At least two other traders said that the combination of lower prices and lower volume sales overseas and the resultant rise in mill-end inventories held the possibility of producers cutting base prices, contrary to the recent trend, to support demand.
“The cards are with mills to support the market at a time when overseas buyers are showing resistance to high prices. Most end-users and dealers are waiting for such an announcement before resuming trading,” they said.
$1 = INR 76.00
