Sentiments have weakened in the local Indian hot rolled coil (HRC) market with trade prices inching lower as steel mills’ decision to roll over November base prices is an indication that higher prices were being resisted by buyers, SteelOrbis learned from industry and trade circles on Monday, November 7.
Indian HRC trade prices have inched INR 200/mt ($2/mt) lower to INR 56,100/mt ($679/mt) ex-Mumbai and lost INR 500/mt ($6/mt) to INR 56,500/mt ($684/mt) ex-Chennai in the south.
The sources said that most mills led by Tata Steel and ArcelorMittal Nippon Steel Limited have announced unchanged flat product base prices for November, taken to be an indication of weakness setting into the market and that the price hikes effected in October were not being absorbed, leading to a slowdown in stock movements. The base prices have remained at INR 57,500-58,000/mt ($696-702/mt) ex-works for hot rolled coil (HRC) and at INR 66,000-67,000/mt ($799-811/mt) ex-works for cold rolled coil (CRC). So, trade prices have again moved visibly below base prices, indicating negative market conditions.
“Trade volumes have not picked up since the festival holidays last month. Producers have also decided to maintain base prices as any increase would be counter-productive and risk a further fall in stock movements,” a Mumbai-based distributor said.
“Aggregate demand is steady but some sourcing by users has moved towards imports. Local trade prices, which were at a par or a slight premium to mills’ base prices, have once again moved into discounted territory with further downside risks,” he said.
At least two other traders said that the average landed price for ex-Japan and ex-Russia HRC below $600/mt CFR remained a threat to the domestic market.
They said that currently the steadily depreciating local currency against the dollar remained the sole hedge against any increase in import volumes. Only large industries with their own foreign currency earnings or able to take cover from exchange rate fluctuations are able to enter into import contracts.
$1 = INR 82.60
