Indian HRC Trade Prices Drop to Over 1-Year Low; Import Bookings Reported

Domestic HRC & CRC prices in traders market reported further decline of around INR 1000-1500/MT ($14-21) against last week.

This week Indian flat steel prices witnessed further correction in traders market amid cost effective imports along with dull domestic demand. Low trades and sluggish sales volume pulled down HRC prices in domestic market.

Domestic HRC prices decline by INR 1000-1500/MT in traders market.Current trade reference prices for HRC (IS2062) 2.5 mm-8 mm is around INR 40,000-40,500/MT (ex-Mumbai) and INR 40,000-41,000 /MT (ex-Delhi).The prices mentioned above are basic prices excluding GST @ 18% on cash payment basis.

According to data maintained with SteelMint, HRC prices in Mumbai have crossed 1-year low mark as similar price levels were seen in Dec'17.

Meanwhile domestic CRC prices have also corrected by around INR 500-1000/MT in traders market this week. Currently trade reference prices for CRC (IS513) 0.9mm is hovering in the range of INR 45,500/MT (ex-Mumbai) and INR 46,000-47,000/MT (ex-Delhi).The prices mentioned above are basic prices excluding GST@18% on cash payment basis.

Prices mentioned above are net of all discounts/rebates.

Indian HRC prices fell to one year low due to following reasons-

1. Recent HRC import bookings- Few trade sources shared that Indian steel mills booked 25,000 MT of HRC from Iran at around USD 450/MT CFR basis for Feb end/March shipments.

Prior this,import bookings of HRC were also reported from South Korea of around 20,000-30,000 MT at USD 525/MT CFR basis for Feb shipments.

There were some inquiries heard for Ukraine origin HRC too from Indian importers, however booking wasn't confirmed till the time of publishing this report.

Landed cost of imported HRC stands cost effective against prevailing domestic offers, making it a strong reason to keep prices under pressure.

2. Sluggish demand in domestic market- Buyers are hesitant to make bookings as market seems to be on correction mode and end users are expecting further fall in prices.Meanwhile major steelmakers are also providing discounts and rebates to escalate buying in the domestic market. Also few traders reported bearish market sentiments and lackluster demand may result to further downside in flat steel prices in near term.

Lower auto sales and cheaper iron ore & coking coal prices are other reasons behind decline in offers.