Local Indian cold rolled coil (CRC) prices have slumped by a massive INR 4,500/mt during the past week to INR 41,000/mt ($635/mt) ex-works even though domestic steel mills are seen to be hiking their base prices, traders said on Tuesday, July 11.
“The CRC market is in shock due to the massive fall in dealer prices coming after five consecutive weeks of stability,” a Mumbai-based trader said.
“The size of the fall is of concern. It is a combination of negatives including high inventories at dealers, a slowdown in stock movements, resistance to base price revisions by steel mills, and a fall in factory growth figures announced by the government,” the trader added.
Market sources said that several of the large domestic steel mills are seen to be increasing their base prices of flat products by around INR 1,000/mt, but the sharp drop in market prices indicates the market’s inability to absorb the increase.
At least two other traders claimed that, while Indian steel mills cited the implementation of the new Goods and Service Tax as the reason for revising their base prices, many small and medium-sized dealers are not compliant with the new indirect tax regime and may be under pressure and selling off old stocks, thereby putting “‘high pressures on the price line”.
$1 = INR 64.55