Indian local hot rolled coil (HRC) trade prices have continued to weaken although the pace of the decline has eased compared to the previous week, but the market has lacked confidence with distribution channels and end-users unwilling to commit fresh bookings amid perceptions that the bottom is yet to be reached, SteelOrbis learned from trade and industry circles on Monday, June 13.
Indian trade HRC prices are down INR 800/mt ($10/mt) to INR 63,000/mt ($810/mt) ex-Mumbai and are unchanged at INR 63,500/mt ($817/mt) ex-Chennai in the southern regional market.
“Sentiments are still very weak and buyers including trade channels and end-users are unwilling to make bookings ahead of the months of weak seasonal demand. The sharp decline seen earlier has eased off partly because of some revival in exports, taking off some pressure from prices of inventories,” a steel distributor said.
However, maintaining a contrarian view, an official at a private mill said that, while it is true that margins of producers will be strained, lower prices will spur demand and producers will need to get back to the “volume game”, pushing for higher domestic sales to bolster aggregate revenue earnings.
He said that not all long-term supply contracts have been concluded on sellers' terms, and so buyers have already got some attractive prices and this would to some extent limit the downtrend of spot prices which has been seen in recent months.
$1 = INR 77.77
