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India steel: Slack HRC sales during holiday season


Indian hot-rolled coil (HRC) prices are lower this week as trading remains sluggish.

There was a holiday mood in east India this week as a five-day religious festival starts today. Market participants in north and west India will start going on holidays later in October for Diwali, slowing trading activity further this month.

The Argus-assessed price for HRC with 3mm thickness dropped by 500 rupees/t ($7/t) to Rs34,500/t ex-Mumbai this week.

Market activity may pick up in November once the monsoon rains end, which will allow construction works to resume. There have been no signs yet of a pick-up in demand for automobiles, so auto-steel demand may continue to remain sluggish in the near term.

"There is no improvement in steel demand. We are seeking a Rs6,000/t reduction in HRC prices in our October steel purchase contract negotiations," said the senior executive of an auto-components manufacturing company. There could be a slight uptick in automobile sales during the current festival season but not enough to lift steel demand by much, he said. India's festival season peaks on 27 October when Diwali is celebrated across the country.

The federal government has announced measures such as lower corporate taxes and financial packages for the housing sector, but these are unlikely to have an immediate impact on steel demand. The government has also not made any announcements on whether infrastructure investments will be accelerated. Infrastructure projects have been the main driver of steel demand over the past few years.

Imported HRC remains uncompetitive, while export offers from Indian mills are active at around $440/t cfr Vietnam.

Source: Argus Media