Local Indian hot rolled coil (HRC) trade prices have edged up in reaction to mills increasing base prices, but demand and trade activity have continued to remain weak, with buyers negotiating prices only for very small tonnages, SteelOrbis learned from trade and industry circles on Monday, May 20.
Sources said that HRC trade prices are up INR 900/mt ($11/mt) to INR 53,900/mt ($646/mt) ex-Mumbai and are up INR 900/mt ($11/mt) to INR 54,900/mt ($657/mt) ex-Chennai in the south after some large mills increased base prices for May by a range of INR 1,500-2,000/mt ($18-24/mt).
The sources said that producers increased prices leveraging market sentiments of a possible supply tightening with some mills going into maintenance shutdowns in May and June, but without any significant changes on the demand side, leading to trade activity being restricted to very small tonnages.
Some traders, however, claim that some trades reported from western regional markets have been concluded at discounts of around INR 600/mt ($7/mt) even for small volumes, indicating demand weakness and that current inventories in trade channels are “comfortable” and more than compensate for the lower supplies from mills.
“There are a lot of challenges on the demand side both economic and political. The recent increase in base prices by producers is having a negative impact reflected in steadily falling booking volumes,” a Mumbai-based distributor told SteelOrbis.
“Trade is carrying a lot of inventory and, with buyers reducing booking volumes, distributors in some regions are pushing discounted sales,” he said.
$1 = INR 83.50