Indian Mills Cut HRC Prices by INR 1500/MT (USD 22) for December
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Amid competitive landed cost of imports, liquidity issues and limited trades observed throughout last month, Indian mills have announced a sharp price cut for December deliveries.
JSW Steel & Essar Steel have announced a price cut and others are likely to follow the suit.
As per market sources report to SteelMint, mills have announced a price cut of around INR 1500/MT (USD 22) for the month of December.
After reduction HRC (2.5-8mm) prices in Mumbai would come around INR 44,000-44,500/MT and CRC ( 0.9 mm) around INR 50,000/MT (basic, GST @ 18% extra).
Which all factors have led to price correction?
1. Landed cost of imports turn cheaper than domestic - Chinese HRC export offers have come down by around USD 50-60/MT in Nov'18 against last month amid high inventories and falling domestic prices. This resulted in sharp plunge in landed cost of imports to India. Its landed cost is assessed around INR 42,200-42,500/MT.
Japanese HRC offers to India were assessed around USD 560/MT, CNF India for January for which landed cost would come around INR 41,000/MT.
Also INR has turned stronger against USD and appreciated to 3-month to 69.6 against USD. This will make imports further cost effective.
2. Liquidity issues: Liquidity crunch in domestic market has impacted retail & traders market resulting in lower trades.Meanwhile weak buying interest in domestic market in turn leads to fall in flat steel prices in domestic market.
3. Falling automobile sales : Major auto makers have reported a dip in auto sales volumes in the month of Nov'18.As per market reports,automobile sales remained slow amid tepid demand in festive season. Maruti Suzuki reported a marginal decline in sales at 1,53,539 units in Nov'18 as compared to 1,54,600 units for the month of Nov'17.
4.Limited export bookings : Limited export bookings to SE Asian nations has kept export prices under pressure. Indian HRC export offers to Vietnam have come down by USD 40-45/MT M-o-M.Last deals was heard around USD 520/MT CFR Vietnam.
