Local Indian hot rolled coil (HRC) trade prices have continued to seek lower levels amid the convergence of several negatives including the fundamentally weak domestic demand, the slowdown in overseas sales and liquidity challenges prompting buyers to stay away from fresh bookings, SteelOrbis learned from trade and industry circles on Monday, April 24.
Indian HRC trade prices have slipped INR 200/mt ($2/mt) to INR 59,800/mt ($727/mt) ex-Mumbai and are down INR 100/mt ($1.21/mt) at INR 58,500/mt ($712/mt) ex-Chennai in the south.
Sources said that indications from the market are that mills are more likely to desist from effecting base price increase in the current month in view of fresh bearish pressures emerging in the market but, despite this, trade channels are not committing fresh bookings as most are facing tight liquidity and high costs of borrowed bank funding and higher-than-normal inventory levels.
“With overseas sales dropping in terms of volumes and prices, inventory pressure is on the rise for local mills and hence the headroom to effect planned base price increases in April is reduced. Mills are able to support local prices at higher levels largely because of the robust exports seen since February. But this is rapidly changing and weak domestic demand is coming into play in a bigger way,” a steel sector analyst with a Mumbai-based financial advisory firm said.
According to a Mumbai-based distributor, trade channels have been facing either restrictions or higher costs for securing bank funding and hence bulk bookings have almost halted.
$1 = INR 82.20
