Local Indian hot rolled coil (HRC) trade prices have weakened during the past week, following base price cuts announced by large mills along with the combined impact of rising inventories and a sustained demand depression, SteelOrbis learned from trade and industry circles on Monday, July 13.
According to sources, trade-level HRC prices have lost INR 200/mt ($2/mt) to INR 56,600/mt ($592/mt) ex-Mumbai and are down INR 400/mt ($4/mt) to INR 57,900/mt ($606/mt) ex-Chennai in the south.
The sources said that major mills dropped base prices but this has had little impact in improving trade volumes as weak demand is expected to persist at least till September owing to monsoon rains, and buyers have remained on the sidelines. Large distributors are also carrying higher-than-average stocks and are unwilling to conclude fresh bookings. Indian mills’ base prices for hot rolled coil (HRC) are standing at INR 58,200/mt ($609/mt) at the lowest, and it is still above the trade price level, with most producers providing discounts to local distributors at the end of every month amid special payment conditions.
A section of market participants expressed hope that the recent launch of antidumping investigations on imports from China would offer some support to the market, but another section of the market claimed that any positive outcome of the investigation is still months away and is unlikely to have an impact in the short term.
“Trade activity is very close to a standstill. Bookings are for minimal volumes from producers and market intermediaries. Too much volume is chasing declining demand. There are still a lot of downside risks to prices,” a Mumbai-based distributor said.
“Mills have cut prices, raising margin erosion. But without any demand improvements, the falling market trend cannot be reversed,” he added.
$1 = INR 95.24
