Indian suppliers of hot rolled coils have had to partially
retract the price increase of Rs 500-1,000/MT ($10.4-20.8/T) they had
implemented earlier this month owing to buyers' resistance to the price hike.
Market watchers blame this on lackluster domestic demand at a time when steel
consumption would normally witness a seasonal upswing with the end of monsoons
and the onset of the festive season. This year, persisting inflation and high
interest rates have been pressuring the auto and other steel consuming sectors;
official data reveal domestic passenger car sales slid by 10.08% year-on-year
in August.
Offers from Indian mills for IS 2062 grade A/B structural HRC of 3mm and above
thickness presently average Rs 34,000-35,000/MT ($709.7-730.5/T), with deals on
the lower end of the range achievable for large volume transactions. “We are
accepting orders at Rs 34,500/T, but all negotiations are on a case-to-case
basis,” a leading western Indian mill official
A JSW Steel official insists his customers in the original equipment
manufacturing (OEM) segment have accepted the price rise and that only some
buyers in the dealer network are resisting. “There are some stray cases of
resistance but those people are not buying anyway,” the official says. Since 1
September, the firm has been offering HRC at Rs 35,500-36,000/MT.
Some market participant also warn that any attempt to increase prices further,
either now or in October, would cause buyers to shun the market. “Now customers
are buying reluctantly. If we lift prices further, there won’t be any buyers at
all,” the western Indian mill official cautions.
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