The local Indian hot rolled coil (HRC) market has continued to weaken with traded prices edging down as sellers have attempted to push sales at reduced prices, while end-users have kept fresh bookings to a minimum, expecting declines to gain pace, SteelOrbis has learned from trade and industry circles on Monday, December 13.
Local Indian HRC traded prices have lost about INR 700/mt ($9/mt) over the past week to INR 66,800/mt ($885/mt) ex-Mumbai. The price is reported marginally higher at INR 67,000/mt ($887/mt) ex-Chennai in the south.
“A price cut by producers is imminent. The only question is the quantum of reduction. This is prompting buyers to defer any immediate bookings,” a Mumbai-based steel distributor said.
It has been learned that at a meeting between the government and representatives of domestic steel producers, the latter offered to cut HRC prices by INR 1,500/mt ($20/mt) but this was rejected by the government which at the behest of small and medium scale consuming industries sought the immediate lowering of base prices by a minimum INR 4,000/mt ($53/mt).
“As a customer-centric company, we are always aligned to the needs of the market. Exports of HRC are easing. Iron ore prices have softened. Currently, we are assessing its impact on pricing and will pass on the maximum benefits of these to customers in the new prices to be announced shortly,” a source at Jindal Steel and Power Limited (JSPL) said.
However, a section of producers maintained that the fourth quarter (January-March) would see a significant demand revival and reverse the current downtrend.
“The coming quarter generally remains strong in terms of demand for steel products and it would be further consolidated, prices would remain range-bound in the next quarter as well as in the next year,” the Steel Authority of India Limited (SAIL) chairperson said.
According to rating agency ICRA, while prices would not touch the historical peaks seen in mid-2021 and pressures on international prices will create pressures on local steel mills, Indian prices will largely be driven by domestic demand dynamics in the next quarter.
$1 = INR 75.50
