Local Indian hot rolled coil (HRC) prices have settled at the lower level of INR 40,500/mt ($674/mt) ex-works, marginally down by INR 250/mt ($4/mt) week on week as more steel mills have adjusted their prices, traders said on Wednesday, April 9.
More steel mills like Steel Authority of India Limited (SAIL) and Tata Steel have adjusted their HRC prices in a downward direction following the adjustments made by JSW Steel and Essar Steel at the beginning of the current month, a Kolkata-based trader said.
While large steel mills like SAIL and Tata Steel have increased their long product prices anticipating a rise in demand for construction grade steel, they have decreased their flat product prices and these products will face import competition as result of the Indian rupee appreciating against the dollar, the trader said.
Market sources said that the downward adjustment of ex-works HRC prices has led to a marginal improvement in transaction volumes during the week, but a section of the market feels that the increase in bookings will be short-lived considering the overall weak demand and slow consumption growth rate in the domestic market.
The sources cited Indian Ministry of Steel figures released earlier this week showing that Indian steel demand grew by just 0.6 percent during the financial year 2013-14, the slowest rate in the last three financial years, to about 74 million mt.
The sources pointed out that, despite persistent weak demand, steel mills had increased prices by INR 4,000/mt ($67/mt) over the previous three months. However, the downward adjustment for April HRC prices has averaged at INR 1,000/mt ($16/mt) and is much too small to trigger any significant uptick in demand, the sources said.
$1 = INR 60.11