After two consecutive weeks of losses, local Indian cold rolled coil (CRC) prices have stabilized during the past week at around INR 44,500/mt ($722/mt) ex-works due to market expectations for the government to provide import protection, traders said on Thursday, January 22.
According to a Mumbai-based trader, expectations have gained ground in the market that the government will next month increase the import duty on CRC to 10 percent from 7.5 percent.
Expectations of a hike in import duty have also prompted local steel mills to defer price adjustments until an official announcement is made by the government, and this has provided support for CRC prices to stabilize, the trader said.
However, market sources stated that buying interest has remained on the low side and stocks have moved slowly, with transaction volumes at a low ebb.
The negative market conditions are expected to persist and CRC prices currently at 12-month low levels are unlikely to have any upside even with import protection given the slowdown in key manufacturing sectors.
Most dealers have reduced their conclusions of fresh deals until such time as the next Indian federal budget 2015-16 is presented on February 28. The market will be keeping a close eye on the budget to see what kind of fiscal impetus the government will offer for the revival of manufacturing industries, the sources added.
$1 = INR 61.64