Local Indian hot rolled coil (HRC) trade prices have remained stable during the past week but low demand during the current monsoon season has weighed on trade volumes and higher-than-normal inventories across the supply chain, SteelOrbis learned from trade and industry circles on Monday, June 29.
Sources said that HRC trade prices are stable at INR 56,800/mt ($601/mt) ex-Mumbai and are unchanged at INR 58,300/mt ($617/mt) ex-Chennai in the south.
According to the sources, buyers have been limited to only immediate need-based restocking and market intermediaries are awaiting base pricing signals from producers for July.
Producers are facing twin challenges of rising costs of production and limited headroom to pass on increases to consumers without causing further declines in sales volumes.
However, a section of traders maintain that mills will be conservative in hiking July base prices, with the hike predicted at around INR 750/mt ($8/mt).
“The combination of high prices, high inventories and a demand slowdown indicates that the market is in for a prolonged bearish phase at least until the end of October. We do not see any immediate positive driver,” a Mumbai-based distributor said.
“Finished steel imports from China are on the rise. The government has also indicated that it will not move to impose any checks, at least not in the next two to three months. So, prices will also remain under import pressure,” he added.
$1 = INR 94.22
