India steel: HRC prices flat on weak demand

India's domestic hot rolled coil (HRC) prices were little changed this week, as buyers were unwilling to accept increase in list prices by India's main producers for June.

Integrated steel mills including Sail, JSW Steel and Tata Steel had increased their monthly HRC prices by 750-1,000 rupees/t earlier this month.

HRC offers by three integrated mills, headquartered in Delhi and Mumbai, were at Rs41,000/t, although best bids were around Rs40,500/t.

The Argus-assessed price for HRC ex-Mumbai was unchanged from last week at Rs40,750/t ($586/t).

Consumers continue to struggle with a shortage of funds in the economy with steel buying restricted to small quantities to meet immediate needs.

"There is no justification for a price hike, as there is no improvement in the sluggish demand," said a Mumbai-based trader.

Some mills are offering about a Rs300/t discount on immediate payment terms, said a trader from the north India city of Varanasi.

Both public and private-sector spending on construction and infrastructure projects are currently on hold, while market participants wait for the new government to review its fiscal policies and presents a new budget on 5 July.

A lending rate reduction announced by India's central bank the Reserve Bank of India received a muted response from ferrous market participants. Consumer loans will become cheaper only when the banks pass on the policy rate reduction to consumers taking loans out on cars and homes. Any increase in consumer spending and a consequent increase in sales and production of cars, homes and consumer durables may take several months to become obvious.