Local Indian cold rolled coil (CRC) prices have remained unchanged during the past week at INR 45,500/mt ($707/mt) ex-works as market participants have preferred to remain on the sidelines in view of a new indirect tax regime kicking in next month and amid concerns over steel mills' base prices for the current month, traders said on Tuesday, June 6.
"After two consecutive weeks of downward movement, local CRC prices have stabilized but the undercurrent of the market remains bearish. There are too many uncertainties and buyers prefer not to step up their purchasing activities until conditions become clearer," a Mumbai-based trader said.
Market sources said that with the new indirect tax regime - the Goods and Service Tax (GST) - taking effect on July 1, dealers are not concluding fresh bookings in order to avoid having stocks which could become liable for tax both under old and new rates.
Many dealers are also not yet fully ready in terms of the digital compliance necessary for filing new returns and claiming tax credits online, and are wary of locking up working capital and so they are unwilling to restock, the sources said.
At the same time, while no formal announcements have been made, Indian steel mills are expected to keep their CRC prices unchanged for the current month and sources said that dealers already carrying higher inventories are keeping away from fresh transactions.
$1 = INR 64.36