India's domestic hot-rolled coil (HRC) prices dropped further this week with weaker demand as monsoon rains and liquidity concerns prevailed.
Most key steel mills earlier this month had increased their listed monthly prices but had to withdraw the price hike this week as buyers rejected the increase.
The Argus-assessed price for HRC 3mm thickness ex-Mumbai fell this week by 500 rupees/tonne ($7/t) over the past week to Rs37,500/t ($529/t).
The main integrated mills dropped their HRC offers by Rs500/t to Rs38,000/t, while certain smaller mills in north and east India were offering even lower at Rs37,000/t. But bids remained low at Rs36,500/t.
An integrated steel producer offered SAE-grade HRC to Vietnam at 505/t cfr but got a best bid of $490/t that it was not ready to accept. Overall export trade was sluggish this week.
Heavy monsoon rain in several parts of India resulted in waterlogged roads, restricting trade and transport, said a Chennai-based trader.
Demand from consumers sectors, such as construction, automotive and consumer durables are falling, as cash flow in the economy continues to remain tight affecting consumer confidence.
India's central bank reduced its lending rate to banks this week by 35 basis points to 5.4pc this week. But market participants said the benefits of this cut will only be available if banks pass on the reduction to borrowers. Banks have so far been slow in reducing lending rates in line with reduction in the policy lending rate. The large burden of bad debts for most banks have also made them wary of lending to retail and corporate customers.
