Indian steel sector is currently grappling with demand enigma due to which HR/CR prices have either corrected or remained flat in May’16.
In last week, SteelMint reported that HRC prices corrected by INR 500/MT in the secondary market amid sluggish demand. However, this week prices have remained unchanged.
Current offers for 2.5 mm HRC are assessed at INR 35,500/MT (ex-Delhi), INR 35,000-36,500/MT (ex-Mumbai) and INR 35,500-36,000/MT (ex-Chennai). All prices include excise of 12.5%.
Offers for 0.9 mm CRC are evaluated at INR 41,000-41,500/MT (ex-Delhi), INR 40,500-41,000/MT (ex-Mumbai) and INR 41,000 (ex-Chennai). Prices include excise of 12.5%.
Tough road for traders
After price surge of around INR 5,500-6,000/MT post MIP announcement in Feb’16, bearish sentiments have once again gripped the Indian steel industry.
As per market sources, traders are selling their products at a discount of INR 1,000-1,500/MT against what mills are offering.
Post MIP announcement, traders bought huge quantities of flat products in March on account of financial year closing and anticipated increase in prices in upcoming days.
However, due to drought conditions in the country, construction activities remained dull during this summer season and with no significant demand, traders were unable to sell their excessive stocks.
“We are selling our old stocks at discounted rates and until this stock gets sold out, we are not in a position to increase our prices”, quoted a trader based in Delhi.
Despite muted demand, Indian mills are not in a mood to lower down their prices. “We are offering small rebates only on bulk purchases but otherwise we are in a wait and watch mode and will continue with the current prices in next month also”, quoted an official from a leading steel manufacturing company.
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