Local Indian hot rolled coil (HRC) trade prices have remained stable amid declining trade volumes with buyers maintaining negative outlook on demand and concerns over energy price driven inflationary pressures building up across the economy, SteelOrbis learned from trade and industry circles on Monday, May 25.
Sources said that trade level HRC price was unchanged at INR 57,100/mt ($597/mt) ex-Mumbai and stable at INR 58,900/mt ($615/mt) ex-Chennai in the south.
According to the sources, industrial buyers had turned very cautious in restocking raw materials following the government advisory seeking austerity measures and several rounds of fuel price hikes over the past two weeks were expected to further aggravate inflationary pressures and resultant demand depressions.
Market participants were also apprehensive that large mills were likely to go in for further base price hike in June citing higher imported raw material costs. The hike expected by the market to be around INR 750/mt ($8/mt) would worsen the bearish mood in the market and trade volumes.
“Energy insecurity stemming from the prolonged war in the Middle East is the biggest concern. Every industrial sector is revising growth forecast downwards. This will continue to weigh on the steel market,” a Mumbai based distributor said.
“The only positive is low import competition. The rapidly depreciating rupee has increased landed cost of imports and domestic prices remain lower in comparison. But this is only offering temporary support to the market as in steadily falling demand will catch up with market rapidly moving into oversupply and high prices—all indicating stagflation,” he added.
$1= INR 95.61
