Local Indian cold rolled coil (CRC) prices have remained unchanged during the past week at around INR 44,000/mt ($711/mt) as buyers moved to the sidelines awaiting signals of possible price adjustments by domestic steel mills, traders said on Tuesday, March 3.
According to a Mumbai-based trader, the market has been waiting to see whether local steel mills will adjust prices after the government increased the import duty on flat steel products to 10 percent from 7.5 percent. The trader said that the market has discounted the possibility of any adjustments in the current month, but steel mills will have to take a decision very soon since there has not been any improvement in demand or sentiment following the Indian government federal budget announced late last week.
"Steel mills are uncertain of their ability to lower base prices since, on the one hand, the duty hike might not be sufficient to restrict imports and, at the same time, they are faced with higher costs following the increase in railway freight rates," the trader added.
Sources said that uncertainty over base prices has prompted most large buyers to delay transactions, leading to lackluster conditions in the market. Apart from sluggish demand, local CRC prices are also expected to come under supply-side pressure as domestic steel mills are finding it difficult to push volumes for export.
The sources said that several large Indian steel mills have cut their CRC export offers by $20/mt to about $480-490/mt FOB, but only a few mills have been able to clinch transactions for April shipments in view of falling steel prices in Western markets, and the possibility of supplies instead being directed to the domestic market cannot be ruled out.
$1 = INR 61.89