Pressures have increased on local Indian hot rolled coil (HRC) trade prices amid limited trading activity, with market participants awaiting signals on July base prices from producers, SteelOrbis learned from trade and industry circles on Monday, July 4.
Indian HRC trade prices are down INR 1,100/mt ($14/mt) to INR 60,100/mt ($761/mt) ex-Mumbai and down INR 1,500/mt ($19/mt) to INR 61,000/mt ($772/mt) ex-Chennai in the south.
“The market is lacking any direction. At one end, trade and stock movement remains sluggish and end-use demand is still at a very low level, but at the other end some producers are claiming that the market might have bottomed out and that July will see price increases,” a Mumbai-based steel distributor said.
“Under such a scenario, trade channels are not willing to make commitments on bookings and instead are waiting for base price signals from mills. End-users are in any case continuing with their need-based restocking,” he said.
According to a steel sector analyst with a financial advisory firm, while local mills are talking about a price increase from rising input costs, falling exports, slow stock movement and inventory pressures do not offer much headroom for such a price increase.
Any price increase under present market conditions may prove to be counter-productive, while the possibility of lower prices stimulating demand too will be negated and there will be some mills with captive raw material sources preferring to maintain prices stable at least during the July-August period, the monsoon season with traditionally lower demand, the analyst said.
$1 = INR 79.00
