Local Indian hot rolled coil (HRC) prices have remained at low levels, while distributors have kept factoring in discounts in their new prices, reflecting the overall bearish outlook, the weak demand and the oversupply in the market.
Sources said that current HRC trade prices are at INR 51,800/mt ($622/mt) ex-Mumbai and INR 52,500/mt ($630/mt) ex-Chennai in the south, decreasing by at least INR 1,800/mt ($22/mt) over the past week. At the same time, last week HRC trade prices were pegged by some distributors at much higher levels, though they were considered to be notional as most sales in earlier weeks were at the discounted price of around INR 52,500/mt ($630/mt).
“In a prolonged bear phase like now, it does not make sense to sell at a sharp discount and maintain a much higher official price. Dealers are therefore converting the discounted price to the official trade price,” a Mumbai-based distributor told SteelOrbis.
“But the most significant aspect is that, even after such adjustments, the new trade price is even lower than what dealers were selling last month after discounts. This indicates that the market still has a downside risk in the new fiscal year,” he added.
$1 = INR 83.30