India: Domestic HRC trade prices soften on bearish market sentiments

Domestic HRC trade prices in few markets retreated by INR 250-750/t w-o-w after hitting almost one year high levels last week.

This week Indian HRC trade prices softened on w-o-w basis due to prevailing monsoon season resulting in moderate demand in the domestic market.

Last week Indian HRC prices recorded almost one year high in Aug '20 since mills announced three consecutive hikes this month on limited supply and restocking demand in the domestic market.

"Sales have come to halt since traders have stopped buying at higher prices. Also, excess inventory with stockists led to softening HRC prices," shared by the major distributor in Faridabad.

SteelMint's assessments of HRC and CRC prices-

• HRC (IS 2062, 2.5 - 8mm) price stands at INR 39,750-40,500/t (ex-Mumbai), INR 40,500-41,000/t (ex-Delhi) while INR 40,000-40,750/t (ex-Chennai).
  
  
• However, CRC (0.9 mm IS513 GR) prices witnessed an increase in few regions since mills did not utilize their downstream activities resulting in the tight supply of HRC. Current price assessment stands at INR 45,500-46,250/t (ex-Mumbai), INR 46,000-46,500/t (ex-Delhi) and INR 45,500-46,500/t (ex-Chennai).
  
  
• The prices mentioned above do not include 18% GST.
  
  

"Major distributors and stockists are unwilling to procure material now since traders are resisting further purchases at higher prices." Shared a major distributor in the Mumbai region.

Mills may further hike prices in Sept'20- Major Indian steel mills are planning to announce another price hike by around INR 1,000-1,500/t at the beginning of Sep '20 considering upside in global prices and tight supply. Also, one of the BF manufacturers in eastern India is planning for maintenance shutdown in Sep for a few days, which may support prices. However, will the price hike get absorbed in the domestic market remains uncertain.