Trade-level prices of hot-rolled coil (HRC) dropped further by INR 1,800/t ($23/t) in the key market of Mumbai this week, weighed down by slow trade activities. End-users and retailers kept to the sidelines awaiting price announcement by the mills.
SteelMint’s weekly benchmark price assessment HRC (IS2062, 2.5-8mm) dropped by INR 1,800/t ($23/t) w-o-w at INR 57,500-58,500/t ($722-735/t), while CRC (IS513 Gr O, 0.9mm) prices are at INR 67,000-68,000/t ($841-854/t), down by INR 400/t ($5/t) w-o-w. Prices are exy-Mumbai, excluding GST at 18%.
SteelMint’s HRC export index drops further
The decline in buying interest in the overseas markets led to a further fall in export offers from Indian steel producers. The aftermath of export duty has seen the mills scouting importing countries with reduced offers.
However, limited demand for imported HRCs in the Middle East, Vietnam and European markets have taken a toll on the export volumes. This led to inventory pile up, exerting pressure on mills to sell in the domestic market. SteelMint’s India HRC export index was assessed at $583/t FOB east coast India, down by $17/t w-o-w.
Coking coal prices on continual decline
Imported coking coal prices are heading southwards since end-June. The price of Australian premium hard coking coal (HCC) stands around $222/t CNF Paradip, India as on 28 July, down by $185/t against $407/t CNF on 21 June. Moreover, on a weekly basis, the average price is down by $20/t at $234/t CNF with two more days at hand this week.
These are also amongst the factors weighing on buying interest.
Market activity slowed over last two weeks
The trade- level activities saw a decline in the second half of the month, weighing on prices. However, it had shown an improvement in the first half of July.
Low buying interest from end-user industries since April had kept weighing on the market moving at a slower pace. On an average monthly basis, HRC prices have showed continual decline from INR 76,000/t ($954/t) in April, to INR 69,800/t ($877/t) in May and further to INR 62,000/t ($779/t) in June. However, in July the drop slowed with prices averaging at INR 59,300/t ($745/t). Prices are exy-Mumbai, excluding GST at 18%.
The pent-up demand was somewhat released in early July, and the market saw industrial buyers coming out to procure with the prices have dropped by end-June. “Automobile, construction, consumer durables and a few steel consuming MSMEs had been posting requirements,” shared a major distributor from the north. However, with the arrival of monsoons, demand slowed from the construction industry. Meanwhile, other participants held back awaiting price announcement by mills for August month sales.
Near-term outlook
The market activities are likely to pick-up again in the next couple of weeks as mills announce their prices for August sales. A few participants opine that the prices are almost at the bottom and shall start stabilizing.
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