After just a brief lull of a week, local Indian hot rolled coil (HRC) prices have started to lose ground once again during the past week, declining by a large margin of INR 1,000/mt ($15/mt) week on week to INR 33,200/mt ($493/mt) ex-works, as the negative outlook on the demand side has worsened and amid reports of a very large stock build-up in the market and among steel mills, traders said on Monday, July 25.
"Local HRC prices have lost INR 1,800/mt ($27/mt) in the course of the last three weeks to a sub-$500/mt level, reflecting strong bearish sentiment," said a Mumbai-based trader.
"The deep-rooted negatives can be gauged from the fact that the steady fall in prices in recent weeks has occurred despite all reports indicating that import protection in the form of the minimum import price (MIP) on steel products will be extended by the Indian government for another six months commencing in August," the trader said.
Market sources said that, despite the big slump in price there is no significant rise in transaction volumes indicating users' lack of appetite to raise their stock levels.
At the same time, actual users and market participants are not willing to conclude fresh transactions, anticipating that the downward spiral will gain momentum in view of rising inventories at every segment of the market, the sources added.
$1 = INR 67.32