Prices in the local Indian cold rolled coil (CRC) market have declined by INR 750/mt ($11/mt) week on week to INR 49,500/mt ($726/mt) ex-works, as buyers were seen to be resisting higher prices by sharply reducing their bookings, traders said on Tuesday, January 24.
“Prices above the INR 50,000/mt level seem to have triggered sharp resistance among buyers. Market participants have concerns that such high prices will further slow down stock movements and cause large inventory build-ups and so booking activity has declined across the country” a Mumbai-based trader said.
“I feel that there will be some stagnation in the market. Even though there is a slowdown in stock movements at the dealers’ end, local steel mills are unlikely to take corrective pricing measures to keep pushing volumes into the market, citing rising input costs,” the trader added.
Sources said that another reason for the slowdown in market activity is because dealers are moving to the sidelines ahead of the national budget on February 1, and the overall sentiment in the market is that the government finances will remain tight and limiting its ability to boost sluggish industrial production.
$1 = INR 68.15