Appreciating Indian currency and correction seen in global prices have led to a correction in prices of Flat products in India. SteelMint sources confirmed that prices for both HRC & CRC have corrected by around 2% in Ludhiana, which is one of the largest consumer of Flat steel in northern India. Last month in Delhi, prices have corrected by around 1-2%. Traders believe this trend may follow for a brief period.
The Flat steel industry has been fighting for its own survival as a lackluster demand in the economy has deeply affected the sales volume. Flat steel traders across India have been panic stricken due to a deteriorating demand in the domestic market. Prices for HRC 2.5 mm were reduced by INR 800-900/MT in Ludhiana. A trader based in Ludhiana said, [su_quote]Lower demand in the market has led to this move. Manufacturers are signing new MoU’s with dealers and there is a pressure on manufacturers to dispose current inventory. We expect the prices to fall further.[/su_quote]
Export Parity diminishing
Manufacturers were able to raise HRC prices in India due to better export opportunities prevailing in the past few months. India exported around 5.5 MnT of Flat steel products in FY14. Europe, Africa & Middle East remained major markets for exports. HRC prices have come down to about USD 540-550/MT FoB level as against USD 580-590/MT from last month.
Import Parity increasing
With appreciating INR, Indian manufacturers also apprehend that imports will be cheaper than domestic prices. This has forced some manufacturers to go for a price cut. Import offers in India currently hover in the range of USD 550-560/MT CFR from China and around USD 570-580/MT CFR from Korea. India imported around 4.6 MnT of Flat steel products in FY14.
Domestic Flat steel manufacturers have continuously raised prices in the past few months amidst low demand in the economy. This has greatly affected the interests of traders. However, with the onset of the new financial year, some manufacturers reduced their prices. This price cut comes at a time when demand has almost evaporated from the market.
Prices in Ahmedabad have also seen mild correction with HR Coils trading at around INR 44,500/MT. As per a trader based in Ahmedabad,
[su_quote]Cold rolled product prices are seeing some downtrend. Prices of secondary manufacturers like Indian Steel have corrected by INR 250-500/MT for products of different thickness.[/su_quote]
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