Hot-rolled coil (HRC) prices in India continued to decline further across regions as sluggish demand and continual decline in export offers weighed on trade reference prices over the past few weeks.
SteelMint’s benchmark price assessment for HRC stood at INR 73,000-74,000/t ($953-967/t), down INR 1,300/t ($17/t) w-o-w, while CRC prices fell by INR 2,200/t ($29/t) to INR 83,000-84,000/t ($1,084-1097/t) w-o-w. Prices are basic excluding GST at 18% on exy Mumbai basis.
Domestic price levels remain impacted by following factors:
1.Decline in export offers weighs on market: The Indian HRC (SAE1006) export index dropped by a significant $145/t in the past four weeks to $920/t FOB east coast India as per the current week assessment. Limited bids from importing countries, mainly the UAE and those in Europe, have slowed down overseas trade activities. Moreover, Chinese HRC (SS400) export offers have dropped by around $85/t in the past couple of weeks and stand at around $850/t. Volatile Chinese steel futures, slow domestic demand on re-emergence of COVID-19 cases and related hindrances have weighed on offers from China, in turn, weighing on global HRC export trade.
Indian HRC (S275) offers to Europe declined to $1,130-1,140/t CFR as against $1,130-1,150/t CFR a week ago. Offers to the UAE for HRC (SAE1006) dropped to $950-980/t CFR from the previous week’s $980-1,000/t CFR level.
2. Sluggish trade: The price hikes announced by major Indian steel mills have failed to get absorbed in the trade segment with prices in the latter remaining at a discounted level. For instance, the mills’ list prices of HRC for Apr sales stand at around INR 79,000-80,000/t exy Mumbai basis, as against the current week’s trade price levels.
“At ground zero, it is a challenge selling and thus any further hikes will not be absorbed by downstream users,” a mill source confided.“Any further increase will push us to the sidelines,” said a source.
Near-term outlook:
Even as mills are keeping the price momentum strong, it is highly likely that trade prices will remain sluggish in the near term as trader sources are of the opinion that major mills shall provide rebate or discount to incite buying interest at a time when demand remains limited in both the domestic and overseas markets.
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