Domestic trade prices for hot-rolled coils (HRC) declined in most markets this week, while the same remained range-bound in other markets. The market activities slowed down this week amidst low demand from end-users, leading to a decline in offer prices from the sellers.
Need-based procurement from end-users continues: The major factor that has weighed on the trade volumes and prices is the procurement pattern of end-users. Delays in the payment cycle alongside rising market prices have impacted demand of finished goods, which has led to a decline in trade activities.
“The market scenario is such that there is a shortage of hot-rolled products and at the same time, demand too is limited,” said a distribution network participant.
Mills’ HRC price hikes in Feb’22 go unabsorbed: The second round of price hikes were unabsorbed in the trade market. The list prices of HRCs stand around INR 65,000-66,000/t ($859-872/t) ex-Mumbai after the two rounds of hikes taken by the mills in Feb’22, SteelMint learned from credible sources. Meanwhile, domestic market prices have been fluctuating in the range of INR 65,000-67,000/t ($859-885/t) since end-Dec’21, as per data maintained with SteelMint.
“The mills have booked decent quantity for exports lately and are mostly full for the March shipments, which means supplies shall remain tight in the domestic market. Yet this could not boost the market sentiments,” said a major distributor from the western region.
Furthermore, export offers for HRCs have dipped by about $20-40/t in the key markets of Vietnam and the Middle East, bringing down SteelMint’s India HRC export index to $864/t FOB east coast.
Near-term outlook
Amidst the Russia-Ukraine led geo-political tension, prices of raw materials like coking coal are again on a rise which may push up HRC trade prices in the upcoming few weeks. On a day-on-day basis, the price of Australian premium hard coking coal (Premium HCC) jumped by $7/t to $471/t CFR Paradip, India (as assessed on 23 Feb’22). Furthermore, market participants are anticipating an increase of INR 1,000-1,500/t by mills for early-Mar’22 deliveries, SteelMint understands.
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