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India: Trade-level HRC prices fall by up to INR 500/t ($6/t) w-o-w amid limited sales

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BigMint Bureau

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21 Nov 2024, 15:32 IST

India: Trade-level HRC prices fall by up to INR 500/t ($6/t) w-o-w amid limited sales

Buyers spurn higher offers amid liquidity shortfalls

Imports see downtrend on stricter customs clearance

India's hot-rolled coil (HRC) prices fell by up to INR 500/tonne (t) ($6/t) this week to INR 48,000-50,000/t ($569-596/t), amid falling sales. Additionally, cold-rolled coil (CRC) tags fell by up to INR 800/t ($9/t) to maintain a range of INR 55,000-58,500/t ($660-692/t) across various regions.

BigMint's benchmark assessment (bi-weekly) for HRCs (IS2062, Gr E250, 2.5-8 mm) fell by INR 500/t ($6/t) to INR 48,100/t ($569/t) on 19 November 2024. Moreover, CRC tags (IS513, Gr O, 0.9 mm) declined by INR 800/t to INR 55,200/t ($665/t). These prices are quoted ex-Mumbai, excluding 18% GST, and are for cut-to-length (CTL) deliveries.

Market updates

1. Trade market sees fall in sales: The trade market witnessed a decline in sales due to subdued demand. Notably, the expected surge in demand has not materialised.

Additionally, a liquidity crunch in the market has increased pressure on all stakeholders. Procurement is taking place only at the lower end of the price spectrum, and higher offers are not being entertained.

"Market demand is currently limited. Participants are willing to reduce prices to fulfil immediate sales targets and then raise them once these are met," a market participant stated.

2. Imports witness downtrend: India's cumulative import volume, based on BigMint's vessel line-up data, stood at 368,530 t till 18 November 2024. It was 687,297 t in October and 776,835 t in September. However, an additional 86,235 t are expected by the end of November. These figures reflect a declining trend.

"Import volumes are decreasing. Customs clearance procedures have become more stringent, leading to delays of 10-15 days for imported material. The increased scrutiny of documents, such as Bureau of Indian Standards (BIS) licences or no objection certificates (NOCs), is adding to costs for importers and further dampening import sentiment," informed a market participant.

3. Exports remain muted: Indian HRC exports experienced sluggishness this week, as global market sentiment deteriorated. Indian offers to the Middle East remained relatively stable w-o-w at $560/t CFR but faced intense competition from Chinese suppliers, whose offers were at $520-525/t CFR. A recent trade agreement between China and the Middle East has further intensified the pressure on Indian exports. Additionally, European offers, range-bound w-o-w at $590-595/t, continued to be impacted by subdued regional demand.

Outlook

The market is witnessing procurement only at lower levels, with higher offers not being entertained. This has led to subdued market sentiment. However, imports are beginning to slow down, which will help tighten supply. Considering these factors, prices are expected to stay range-bound in the near future.