The local Indian hot rolled coil (HRC) market has showed signs of some stability in the past week, with prices holding their ground amid the emergence of need-based restocking by a section of industrial users and a slight easing of import pressures, SteelOrbis learned from trade and industry circles on Monday, September.
Sources said that HRC trade prices have been stable at INR 47,200/mt ($565/mt) ex-Mumbai and are unchanged at INR 50,050/mt ($597/mt) ex-Chennai in the south.
According to sources, some large industrial users have been seen to be cautiously restocking ahead of the festival holidays. However, they said that, while the restocking has provided support for prices, it has not been sufficient in terms of booking volumes to enable prices to consolidate at higher levels.
As per the information available from data regarding vessel arrivals at ports, imports in October are roughly estimated at 220,000 mt which, being lower than the projected arrival of 620,000 mt in September, has eased sentiments regarding import pressures on local prices.
“Considering the prolonged downtrend over the past several weeks, any stability is welcome. But in our assessment, there is a lot of caution among end-users and any upside potential going forward will be very limited,” a Mumbai-based distributor told SteelOrbis.
“The current prices are almost at a 45-month low. Margins for producers and trade channels are minimal and not sustainable. We see some more losses as the market heads into the festival holidays in another week’s time,” he added.
Furthermore, according to sources, the market needs to improve in order to maintain operational viability for both producers and market intermediaries. There are sustained pressures from imports. The supply-side has become even more challenging with the higher inflow of material into the market from the new capacities of JSW Steel and NMDC Steel Limited.
$1 = INR 83.60