Indian trade-level HRC prices continue to remain range-bound in cautious market

Trade-level hot rolled coil (HRC) prices have stayed range-bound in the key markets of Mumbai and Faridabad. The persistently cautious buying approach amongst end-users in the trade segment made sellers quote slightly lower in other markets covered under the assessment.

SteelMint's benchmark assessment for HRCs (IS2062, Gr E250, 2.5-8mm) stood at around INR 59,500-60,500/t ($725-737/t) exy-Mumbai as on 18 April 2023. CRC (IS513 Gr O, 0.9mm) prices were assessed at INR 63,500-64,500/t ($773-786/t) exy-Mumbai. The above prices were exclusive of GST at 18%. (INR 1 = USD 0.0121792 ; USD 1 = INR 82.11)

Factors impacting trade-level prices:

1. Export market slow amid limited bids: Indian HRC manufacturers kept offers unchanged for the Middle East market this week despite limited bids and competitive Chinese and Japanese offers. Meanwhile, Indian mills have avoided quoting in the Vietnamese market since mid-January due to lower realizations. SteelMint's HRC (SAE1006) export index stood unchanged at $695/t FOB east coast.

Chinese HRC (SS400) export offers dropped to $665/t FOB Rizhao in mid-April after having reigned at around $695/t FOB for most of March. This is another reason why overseas buying has slowed down a bit.

Moreover, there is a single outbound vessel to Europe with a mere 25,000 t of HRCs in April 2023 till date, as per the bulk HRC shipment data maintained with SteelMint. Last month, the volume aggregated to a more robust 467,067 t.

2. News of fresh Japanese HRC import bookings making rounds: Some unconfirmed Japanese-origin HRC import deals, with volumes aggregating to 20,000-30,000 t, have been heard booked at $695-700/t CFR India. This would roughly amount to INR 58,900/t as landed cost in Mumbai while the domestic market price is still treading higher. The offers from Japan were around $740-750/t at the beginning of April.

3. IIP data shows drop in February: The movement of manufacturing indices too isn't much promising. The Purchasing Managers' Index showed a slower pace of growth at 56.4 points in March against 55.3 a month back. However, the Index for Industrial Production (IIP) dropped to 136.8 points (-5.5%) in February against 144.8 in January, as per the recent data released by the Ministry of Statistics and Programme Implementation (MoSPI). This indicates that overall demand had started slowing down in February, while the slow-growing PMI relays an extension of the same in the present time.

3. Buyers more cautious in traders' market: Limited exports are keeping distributors in India a bit cautious while procuring as they are expecting a price correction sooner or later.

"Indian mills continued increasing list prices over January till April despite activities in traders' market slowing down by mid-February," commented a western India-based major distributor.

"There are not many negative sentiments in the traders' market which are keeping prices from rising. Financial year closing activities, Ramadan holy month, and buyers' aversion to acquiring in bulk quantities are possible reasons for the slowness in the market," said a major northern region-based distributor source.