Local Indian hot rolled coil (HRC) trade prices have edged down, but the decline margins were limited by a combination of a slight tightening of supplies with producers cutting down outputs and the steady restocking by trade channels at low prices, SteelOrbis learned from trade and industry circles on Monday, August 15.
Indian HRC trade prices are down INR 400/mt ($5/mt) to INR 57,000/mt($714/mt) ex-Mumbai and down INR 800/mt ($10/mt) to NR 57,600/mt ($721/mt) ex-Chennai in the south.
According to a steel sector analyst with a Mumbai-based financial services firm, data collated from a sample of steel producing companies indicated that average plant capacity utilization levels in August were down to around 80 percent compared to an average above 90 percent in the first quarter of the current fiscal year.
This, combined with some mills bringing forward annual plant maintenance shutdowns, led to a noticeable supply tightness in the market, checking the pace of the downslide of prices, the analyst said.
A Mumbai-based steel distributor said that, with the market finding stability at a lower level, trading activity has been rising with prices having bottomed out, even though average booking volumes per trade are also on the lower side.
“Flat product prices have bottomed out largely based on supply-side management of producers. But any upside from current levels will depend on the demand revival, which continues to be uncertain,” an official at a government-run mill said.
“The next trigger for any price upside will be the possible withdrawal of 15 percent export tax which is seen as imminent,” he said.
$1 = INR 79.80