Price adjustment expectations amid high stocks in local Indian HRC market

Local Indian hot rolled coil (HRC) prices have moved down to levels around INR 36,500/mt ($587/mt) ex-works, with dealers across local markets commencing to offer discounts of INR 500/mt ($8/mt) as market expectations of a price correction have gained momentum, traders said on Tuesday, January 13.
 
Two Mumbai-based traders said that, with reported high stocks both at local steel mills and at dealers,  market expectation of steel mills adjusting their prices later this month have been getting stronger, prompting market intermediaries to sell at a discount.
 
At the same time, ex-China HRC offers have moved down by about $10-15/mt to around $475-480/mt CFR Mumbai, but have evoked little interest from importers considering the slow-down in off-take by local importers and end-users, the traders said.
 
Under the circumstances of limited import competition and the Indian currency at INR 62.14 to a dollar, local steel mills could take this window of opportunity to adjust prices and increase liquidation of stocks, the traders added.