Prices in the local Indian cold rolled coil (CRC) market have remained stable during the past week at INR 44,500/mt ($653/mt) ex-works, while trading activity has remained at negligible levels with the market still in the grip of an acute cash liquidity crisis, traders said on Tuesday, November 22.
“The government has banned old high value currency notes. But the replacement with new notes is moving at a snail’s pace. Moreover, there are severe restrictions on cash withdrawal amounts from bank accounts and so dealers have no cash to meet incidental business expenses and fresh bookings have remained at negligible levels,” a Mumbai-based trader said.
Several market sources said that steel mills and all market participants are currently busy trying to get a fix on the impact of the liquidity crisis and will have to revise all demand and pricing projections as it will have a medium- and long-term impact on consumption and demand.
In fact, at least two traders said that they are considering commencing liquidation of existing stocks at a discount to get cash into their bank accounts although they refrained from giving out any details of the proposed discount levels.
Market sources said that another impact of the currency note ban will be that local steel mills will refrain from any immediate base price revision for December deliveries.
$1 = INR 68.19