India: Trade-level HRC prices fall by up to INR 500/t ($6/t) w-o-w in subdued market

• Buyers unwilling to accept higher prices
  
  
• Inventory levels reduce but buyers cautious
  
  

Hot-rolled coil (HRC) prices fell by up to INR 500/tonne (t) ($6/t) this week to INR 48,000-50,300/t ($569-596/t), amid subdued market activity amid limited demand. Also, cold-rolled coil (CRC) prices also fell by up to INR 700/t ($8/t) to maintain a range of INR 55,700-58,400/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 48,000/t ($569/t) on 13 November 2024. However, CRCs (IS513, Gr O, 0.9 mm) remained stable at INR 56,100/t ($665/t). These prices are quoted ex-Mumbai, excluding 18% GST, and are for cut-to-length (CTL) deliveries.

Market updates

1. Cautious market sees selective demand: The current market is characterised by selective purchasing, driven by specific needs. Liquidity constraints are further making the situation more difficult. Domestic traders, too, are adopting a cautious approach, leading to an overall subdued demand environment. It is also rumoured that the inventory levels at the mills have reduced 10-15% for the current month although BigMint was not able to confirm this at the time of publishing this article.

"The market has rejected the recent price increases imposed by mills. As the Diwali festivities have concluded, many participants are facing liquidity pressures. The upcoming week will be pivotal in determining the market's trajectory. This is because, despite some of the players in the trade segment quoting higher, there is a resistance to buying at the higher end of the price spectrum," a market participant stated.

2. Import trends: The cumulative import volume, based on BigMint's vessel line-up data, stood at 130,519 t till 11 November 2024. It was 687,297 t in October and 776,835 t in September. However, an additional 2,31,803 t are expected by the end of November.

3. Export trends: Indian steel hot-rolled coil (HRC) exports remained subdued this week as market sentiment weakened. Offers to the Middle East persisted, although these faced competition from other regions.

European markets exhibited similar trends, with stable offers but slow demand. Market participants adopted a cautious approach, awaiting further developments.

Additionally, ongoing global anti-dumping investigations contributed to the overall sluggish market sentiment.

Outlook

The market is currently witnessing demand-driven buying, with end-users prioritising lower prices despite upward pressure from distributors. While steel mills have implemented price increases, their sustainability remains uncertain. Given the recent price reductions by global steel mills, domestic trade prices are expected to stabilise within a narrow range in the near future.