Indian Steel Mills Roll Over Domestic HRC Prices for Aug’19
SteelMint in conversation with market sources learned that major Indian steelmakers have rolled over HRC, CRC prices in Aug’19. However market sources are eyeing for announcement of rebates and discounts owing to thin trades and sluggish demand experienced in domestic market.
Thus current offers from Indian steel mills for HRC (2.5-8mm, IS2062) is around INR 38,000/MT (ex-Mumbai) and for CRC (0.9mm, IS 513) INR 44,000/MT(ex-Mumbai). Prices mentioned above are basic and extra GST@ 18% will be applicable.However the same is not yet passed on to trade market.
Indian HRC prices moved down by INR 2,000-2,500/MT in domestic market throughout the month of July and were trading over 1.5 years low.
Steel mills consider roll over in flat steel prices due to :
1. Subdued demand in domestic market- Since last two months HRC prices continued to remain on lower side owing to thin trades and bearish market sentiments prevailing in domestic market. Traders reported higher inventory levels amid poor sales volumes and weak buying interest among buyers due to ongoing monsoon season. Thus domestic HRC prices continued to remain under pressure. Meanwhile traders are expecting discounts and rebates to support pricing.
2. Auto sales continue to decline in Q1- As per market reports, auto sales reported decline in first quarter of this fiscal against the backdrop of consumer sentiment continuing to remain subdued because of the overall slowdown in the economy and tightening of credit norms by banks.
The situation further worsened as demand in the rural market nosedived because of falling farm income and lack of financing options from NBFCs.
In Q1 FY20, sales of automobiles from showrooms declined by 6% to 5.12 Million units. Retail sales of passenger vehicles declined by just 1%, but commercial vehicle sales fell sharply by 14%.
3. Falling prices in export - Indian HRC export offers to Vietnam are heard around USD 500-505/MT CFR basis down by USD 5-10/MT against previous offers heard around USD 505-510/MT CFR basis.Thus lower export bookings and dull domestic market will further pressurize HRC prices in domestic market.
source: SteelMint
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