India: Trade-level HRC prices range-bound w-o-w amid decline in demand

• Higher stocks, low demand cause liquidity crunch
  
  
• Traders seek price support for Oct-Nov, mills silent
  
  

India's hot-rolled coil (HRC) prices remained range-bound this week at INR 47,500-49,900/tonne (t) ($563-591/t) amid slow sales. Cold-rolled coil (CRC) tags were stable at a range of INR 53,500-58,500/t ($634-693/t) across various regions. Softening demand and a persistent liquidity crunch dampened market activity.

BigMint's benchmark assessments (bi-weekly) for HRCs (IS2062, Gr E250, 2.5-8 mm) and CRCs (IS513, Gr O, 0.9 mm) remained steady at INR 48,000/t ($569/t) and INR 54,200/t ($642/t), respectively, on 26 November 2024. These prices are quoted ex-Mumbai, exclude 18% GST, and are for cut-to-length (CTL) deliveries.

Market updates

1. Trade market battles flagging demand: The trade market witnessed a significant decline in demand, leading to limited sales. Buyers exercised caution, purchasing only essential items and negotiating lower prices. In recent times, a cash crunch has emerged due to higher inventories, slow trades, and difficulties in recovering credit sales. This liquidity shortfall hindered trade this week as well.

Presently, the market is looking to mills for price support, to offset the gap between trade and list prices. Mills' previous price hikes were not absorbed by the market.

"The high levels of inventory throughout the supply chain, along with slower recovery in the market, has compounded the liquidity strain on traders," a market participant stated. "The market expects some price support for October and November sales, but mills are silent on the matter, which has dampened sentiment," he added.

2. Imports show downtrend: India's cumulative import volume, based on BigMint's vessel line-up data, stood at 492,904 t till 25 November 2024. It was 687,297 t in October and 776,835 t in September. An additional 42,591 t are expected by the end of November, which indicates that, tentatively, November's volume would be lower than the previous months' totals. Another 81,117 t are likely to arrive in the first week of December 2024.

3. Exports remain sluggish: Indian HRC exports remained sluggish this week due to the competitive pricing of Chinese steel in the global market. Indian mills were largely inactive in offering material to the Middle East, especially ahead of the upcoming National Day holidays in the region, due to the availability of more affordable Chinese alternatives.

Additionally, the European market witnessed limited activity, and Indian mills maintained stable offers. As of 22 November, India has utilised only 8% of its allocated HRC quota for Europe. Export offers to Europe (for S275, 3 mm) remained steady w-o-w at $590-595/t CFR Antwerp ($540-545/t FOB east coast India).

Outlook

In the near term, prices are expected to remain range-bound, with weak demand, liquidity issues, and high inventory levels posing significant challenges. The export landscape will likely reflect these dynamics, with Indian traders remaining cautious on their offers.