Indian steel-makers have cut the bench-mark hot rolled coil (HRC) prices by ₹3,000 – 3,500 per tonne for August deliveries. Mills cite poor demand in domestic and export markets and slow buying from the trade for the downward price revision.

Month-on-month prices have declined by 3–4 per cent with HRC prices now being in the range of ₹58,000–59,000 per tonne; amongst the lowest so far in 2022, and over 25 per cent fall from the peak they commanded earlier this year.

According to market sources, the cold-rolled coil (CRCs) prices are down by ₹2,650/ tonne (around 4 per cent month-on-month). Post revision, CRC prices are now in the ₹65,350-66,500/ tonne range.

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Rebar prices too have seen a decline too. Blast furnace route rebar price stood at ₹56,900/tonne, down by 3-4 per cent, month-on-month.

“From a peak in April, HRC prices have been declining. We had hoped that prices have bottomed out and mills could roll over their July prices in August. But domestic demand continued to be poor, and so most of them announced a ₹3,000– 3,500-odd per tonne downward revision in prices,” a steel mill official told BusinessLine.

Exports weakness

Exports of steel have been badly hit since the imposition of a 15 per cent duty in May. For the April to June quarter, exports declined 39 per cent, year-on-year, as per details available with the Steel Ministry.

In June, exports declined 60 per cent, y-o-y.

Since May, offers have remained under pressure while volumes took a hit. The key markets of West Asia, Europe and Vietnam have seen less bookings for Indian-origin HRC.

This led to inventory pile up, exerting pressure on mills to sell in the domestic market.

Slow buying

Seasonal weakness saw poor demand from the domestic market too. Anticipating further fall, dealers reduced purchase orders. Restocking too has not happened at dealer levels.

Indian steel mills were reportedly pre-poning their annual maintenance as they did not want to pile up on inventory.

“Some of the larger buyers are negotiating for more discounts or holding back purchase decisions because of volatility in prices,” a mill official said, adding that demand from the construction sector remains lower than expected.

For Indian steel companies, raw material prices are witnessing some decline. Imported premium hard coking coal (Australia) have fallen on a weekly basis by about $327/tonne from $554 in May to $227 in June.