Local Indian cold rolled coil (CRC) prices have remained stable at INR 49,000/mt ($821/mt) ex-works over the past week, while transaction volumes have improved on the back of restocking activity ahead of the expected price increase by domestic steel mills, traders said on Thursday, July 3.
According to a Mumbai-based trader, large steel mills like Steel Authority of India Limited (SAIL), JSW Limited and Rashtriya Ispat Nigam Limited (RINL) are expected to announce an across-the-board price hike around July 15.
Some amount of restocking has been seen in the market ahead of the price increase even though traders are reportedly carrying sufficient inventories, the trader said.
"Steel producers seem to have regained their pricing power. They have already increased long product prices over the past few months and now they will make similar adjustments to flat steel products this month," a Kolkata-based trader said.
"Steel mills are forecasting a 6-7 percent upward movement in flat product prices over the next quarter (July-September), anticipating a boost to demand from the Indian budget to be presented to parliament next week," he added.
Market sources said that the pricing power of domestic mills has also been strengthened by continued easing of import competition and no significant CRC import transactions have been reported in the market during the past week.
The sources said that ex-China CRC offers have been maintained at around $615/mt CFR Mumbai, but traders are waiting for offers below the $600/mt mark.
"Import volumes are unlikely to improve unless offers move below $600/mt and the rupee strengthens below INR 60 to a dollar to ensure viable import margins," a trader said.
On Wednesday, the rupee reversed its previous soft trend and gained INR 0.40 against the US currency to close at INR 59.67 to a dollar.