Local Indian hot rolled coil (HRC) trade prices have remained stable over the past week amid very slack trade attributed to weak demand, the liquidity shortages being faced by market intermediaries, and fresh pessimism over the lower-than-expected GDP growth rate announced recently by the government, SteelOrbis learned from industry and trade circles on Monday, December 2.
Sources said that HRC trade prices are stable at around INR 48,700/mt ($577-/mt) ex-Mumbai and also unchanged at INR 50,500/mt ($599/mt) ex-Chennai in the south.
According to the sources, distributors have not been concluding fresh bookings as, not only are inventories at intermediaries on the higher side, but firms have also been facing challenges in securing working capital credit from banks and hence are cautious and are focused on conserving cash.
The relative stability seen in the market was not significant at it was amid extremely thin trading activity and, with another 80,000 mt of imports scheduled to land at Indian ports by December 10, as per the vessel arrival schedule, HRC prices will continue to remain under pressure, the sources said.
“Not only will demand and prices remain extremely weak, but macro-economic data has cast fresh pessimism in the market. The GDP growth rate of 5.4 percent in the second quarter of the fiscal year 2024-25 and the slowest in the last eight quarters indicate that the possibility of a demand uptick is very remote going forward,” a Mumbai-based distributor told SteelOrbis.
“The bearish condition is also worsened by import pressures. Though volume of import booking is declining, inward shipments in absolute term is still very large at a time when domestic demand is weak,” he added.
$1= INR 84.30