Local Indian cold rolled coil (CRC) prices have bounced back during the past week, increasing by INR 200/mt ($3/mt) to around INR 38,700/mt ($586/mt) ex-works, due to fresh reports of import protection and an imminent price hike by domestic steel mills, traders said on Tuesday, September 29.
“It seems to be just a matter of time before the Indian government brings CRC under safeguard duty as in the case of hot rolled coil (HRC). Domestic mills will go for an October price hike. All this points to CRC prices consolidating at higher levels,” a Mumbai-based trader said.
“ But most market participants are concerned that the consolidation is being driven by the renewed pricing power of steel mills and lower import competition rather than by demand which has remained on the low side as reflected in the low transaction volumes in the market,” the trader said.
A section of market sources maintained that demand for market protection is on the rise and it is apparent that steel producers have more muscle to lobby for protection than consumers hit by rising prices amid weak demand for end-use products.
“Protection will only skew the market dynamics and, while it will support local steel mills in the short term, rising costs will impact value addition and the viability of steel consumers,” an official at the Engineering Export Promotion Council (EEPC) said.
Sources said that, in anticipation of safeguard duty on CRC, ex-China offers have been quick to move in a downward direction though importers have been cautious about concluding transactions given the low off-take volumes in the local market.
Meanwhile, ex-China CRC offers have decreased by $5/mt week on week to around $340/mt CFR Mumbai for November shipments.