India: Trade-level HRC-CRC prices remain volatile amid sluggish demand

Trade-level prices of hot-rolled coils (HRC) and cold-rolled coils (CRC) continued to remain volatile in the second week following the reduction in list prices of mills for June sales. End-buyers' need-based procurement pattern continues to weigh on the traders' market prices, a few distributors hinted.

SteelMint's benchmark bi-weekly assessment for HRCs (IS2062, Gr E250, 2.5-8mm) stood at INR 55,000-56,000/t ($668-681/t) exy-Mumbai on 13 June. Prices have edged up by INR 300/t ($4/t) w-o-w and by INR 400/t ($5/t) against the previous assessment on 10 June.

"Some distributors in the region have been quoting prices for HRCs on the higher side, as they feel mills might not extend any further price support," said a reliable market source. However, whether the upward momentum could sustain is a major concern when cheaper imports are about to enter the market, he added.

CRC (IS513 Gr O, 0.9mm) prices, however, dropped by INR 500/t ($6/t) w-o-w to INR 59,000-60,000/t ($717-729/t) exy-Mumbai against levels seen in the preceding week. Prices mentioned exclude GST at 18%. (INR 1 = USD 0.0121519 ; USD 1 = INR 82.2913)

Factors impacting trade market prices

1. Increasing competition in the overseas markets: Indian mills are feeling the pressure of increasing price competition on the global trade platform. SteelMint's India HRC (SAE1006) export index dropped by $4/t w-o-w to $566/t FOB east coast India.

Competitive offers from other exporting countries in the Middle East and the European markets have led to a decline in offers from India as well. Buyers in these markets are actively scouting for cheaper alternatives, which has led to a bid-offer disparity for Indian mills. Despite the above hurdles Indian mills have been slow in reducing their offers in the above markets.

An export deal to Nepal for 4 rakes (approximately 8,000 t) was heard concluded at $595/t ex-works (exw); equivalent to $615/t CFR Raxaul border for July 2023 delivery. Subsequent to the deal, fresh quotes from other Indian mills to Nepal dropped by about $20/t to $595-600/t CFR Raxaul border.

2. Cautious domestic buyers: Domestic buyers are quite cautious about buying in bulk volumes. "Buyers have continued to show a restraint towards booking in bulk and have maintained a hand-to-mouth pattern of procurement over the past 3-4 months," said a major distributor from the north. Trade market prices have been moving downhill since mid-April 2023. Meanwhile, the availability of cheaper imports has also dented the sentiments and weighed on trade prices.

A total of 215,299 t of HRCs and plates were imported into India in May 2023, as per the bulk vessel line-up data maintained with SteelMint. This is higher by 8.4% against the preceding month and 59.1% than the year-ago period.

Near-term outlook India's domestic trade level prices of HRCs and CRCs are likely to stay volatile in the near term amid the low-priced imports coming in June. Meanwhile, the volatility in Chinese ferrous futures and export offers over June is likely to keep buyers in both India and overseas cautious.