Pressure has continued unabated on local Indian hot rolled coil (HRC) prices which have declined by INR 300/mt ($5/mt) during the past week to around INR 33,000/mt ($516/mt) ex-works amid lackluster market conditions and negligible buying support, traders said on Monday, June 15.
"After recording losses for the fourth consecutive week, the nervousness in the market has increased," said a Mumbai-based trader.
"With domestic mills continuing to offer volume discounts of around INR 1,000/mt ($16/mt), dealers have been forced to liquidate old higher-priced stocks and the absence of any buyers has resulted in mounting pressures on prices," the trader said.
"Since local steel mills have restricted discounts linked to volumes, medium-sized and small dealers have been hit by the slow movement of existing stocks and at the same time have not risked booking higher volumes to avail discounts," he added.
Several sources said that the market is concerned over the ongoing declining trend of HRC prices which has been observed for over a month as there has not been any increased import competition, indicating the negative outlook on the domestic demand side.
Sources said that ex-China HRC offers have remained in the range of $460-470/mt CFR Mumbai for July-August shipments, but no significant transactions have been reported in the market.
However, the brief lull in import transactions is expected to be short-lived since most analysts have forecast a continued rise in import pressure as Chinese offers will remain aggressive and as local steel mills will have limited ability to pass on benefits of lower iron ore prices to flat steel producers, the sources added.
$1 = INR 64.06