India HRC price steady as election subdues demand

India's domestic hot-rolled coil (HRC) prices were little changed this week amid subdued demand.

An ex-works HRC offer was heard at 41,500 rupees/t ($597/t) from a large steel producer, while two ex-works offers were reported at Rs42,500/t from integrated steelmakers.

A south India-based steel distributor bought a HRC cargo at Rs44,500/t, including freight and goods and services tax (GST), which is equivalent to Rs42,500/t ex-mill price.

The Argus-assessed price for HRC ex-Mumbai was unchanged from last week at Rs42,000/t.

Demand is typically weak at the start of the new fiscal year, which began on 1 April.

A liquidity crunch in the economy has also curbed demand for HRC from downstream buyers. India is facing a currency shortage as high levels of non-performing loans at public sector banks curb new lending. Cash is actively being used in spot steel trading.

Government spending on infrastructure has also slowed in the past few weeks, as ministers are busy campaigning for the general elections. Private-sector investment is also subdued ahead of the formation of a new government.

Market participants said demand may remain subdued in April-June while the market waits for election results to be declared and a new government to assume office.

India's HRC consumption edged up by just 1.3pc from a year earlier to 13.39mn t in April-February, the first 11 months of the financial year, much slower than the 7.5pc growth in total consumption of finished steel products.