India: Trade-level HRC prices continue to slide amid fall in demand
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Trade-level hot-rolled coil (HRC) prices continued their downtrend this week, amid an unstable market characterised by a noticeable drop in demand. HRC prices stood at INR 47,000-51,000/tonne (t) ($563-611/t), having declined by INR 1,000/t ($12/t) across various trade markets. Similarly, cold-rolled coil (CRC) prices also decreased by INR 1,000/t ($12/t), maintaining a range of INR 55,000-60,000/t ($659-719/t).
Market rumours suggest that several steel mills have announced price adjustments for HRCs and CRCs in September. These adjustments reportedly include price reductions or price support measures in the range of INR 500-1,000/t ($6-12/t). However, official confirmation regarding the same has remained elusive.
The expected list prices of HRCs (IS2062, Gr- E250, 2.5-8 mm) stood at around INR 49,000-50,000/t ($587-599/t) ex-Mumbai, while those of CRCs (IS513, Gr-O, 0.9 mm) were at around INR 55,000-56,000/t ($659-671/t) ex-Mumbai for September 2024 sales. These prices are for the coil form and exclude GST at 18%. However, the list prices of a few private mills were hard to pin down.
BigMint's benchmark assessment (bi-weekly) for HRC (IS2062, Gr E250, 2.5-8 mm) prices decreased by INR 900/t ($11/t) to INR 47,100/t ($564/t) on 20 September 2024, compared to the previous week. However, CRC (IS513, Gr O, 0.9 mm) prices remained stable at INR 55,900/t ($570/t) during the same period. These prices are quoted ex-Mumbai, excluding 18% GST, and are for cut-to-length (CTL) deliveries (INR 1 = USD 0.0119772; USD 1 = INR 83.4917).
Market updates
1. Slump in traders' market continues: The market has been facing subdued demand, coupled with increased supply, which has exerted downward pressure on prices. As the quarter is about to conclude, stakeholders are under significant strain, given narrowing margins and a tightening working capital cycle.
"Buyers are exhibiting a more conservative purchasing strategy, acquiring only necessary quantities at lower levels due to surplus inventory throughout the supply chain," remarked a market participant. "With the end of the quarter approaching, businesses are under pressure to liquidate stock and report sales. As a result, a further price decline may be anticipated," they added.
2. Export and import trends: The cumulative import volume, based on BigMint's vessel lineup data, touched 5,11,767 t till 16 September 2024. It was 6,27,426 t in August and 6,36,651 t in July. However, an additional 2,85,071 t are expected by the end of September.
Indian steel mills maintained their HRC export offers to Southeast Asia and the Middle East steady in light of sluggish global market sentiment and the Chinese Mid-Autumn Festival holidays. Meanwhile, Indian HRC export offers to Europe also remained stable w-o-w, with no confirmed transactions reported due to the ongoing anti-dumping investigation.
Outlook
The increased production of steel mills, along with a surge in imports, has led to higher inventory levels across distribution channels. This surplus supply has coincided with a continuous decline in demand. Given that this market dynamic is expected to continue, steel prices are expected to remain relatively stable at the current levels for the upcoming month.