Local Indian hot rolled coil (HRC) trade prices have continued to seek lower levels amid sustained low activity and the market ignoring the base price increases announced by mills, indicating a deepening of the negative outlook for demand, SteelOrbis learned from trade and industry circles on Monday, January 8.
Indian trade HRC prices have lost INR 400/mt ($5/mt) to INR 57,600/mt ($692/mt) ex-Mumbai and are down INR 200/mt ($3/mt) to INR 58,350/mt ($701/mt) ex-Chennai in the south. However, a few market sources have reported prices at as low as INR 54,000-55,000/mt ($649-661/mt) ex-Mumbai. According to one trader, there has been a lot of talk in Mumbai circles of a medium-sized HRC producer selling products aggressively at deep discounts to overcome the working capital shortage it faces.
According to the sources, market sentiments have also seen a further dip after mills increased base prices for January, prompting trade channels to be more cautious as regards committing fresh bookings at higher prices.
“The base price hike by mills has come at a time when the demand outlook is very negative. The move by the producers will not be supportive to the market. It will only prolong the current low activity in trade channels and end-users too can be expected to reduce restocking or move towards import sourcing,” a Mumbai-based distributor said.
“Local prices have already seen a downward correction of around three percent over the past four weeks. We see a further weakening amid import pressures and high-cost local products. We will be in a better position to assess the market resistance to higher prices over the next few business days,” he said.
Import HRC prices (mainly Chinese origin) have been at $605-610/mt CFR.
$1 = INR 83.20
