Local Indian cold rolled coil (CRC) prices have remained stable during the past week at around INR 41,000/mt ($641/mt) ex-works against a backdrop of low trading activity, traders said on Tuesday, May 26.
"It appears that dealers completed restocking early in the month. With local steel mills deciding to keep their base prices unchanged through June, dealers are unwilling to make large bookings, resulting in low market activity during the week," a Mumbai-based trader said.
"However, a few dealers in the market around Chennai in southern India are offering discounts of around INR 200/mt ($3/mt), but this has not had much impact on trading volumes in the region," the trader added.
Sources said that interest in imported CRC has also remained on the low side with only a few transactions for small volumes for July shipment reported in the market in response to the fall in offer prices.
The sources said that ex-China CRC offers have moved down by another $10/mt for the second consecutive week, now ranging at around $460-470/mt CFR Mumbai, for July shipments.
Some market sources said that CRC stocks are moving very slowly but the market is looking at a medium-term demand uptick on the back of the revival in demand and sales in the auto sector. Indian automobile sales increased by 18 percent during April, with the April sales volume the highest in the last 30 months.
However, sources said that there would be a lag between the automobile sector revival and resultant demand for steel, largely because many of the auto sales were from inventories held by manufacturers and dealers built up during the prolonged downturn.
At the same time, higher demand might not offer support to local prices if import offers continue on their current downward trend, a trader said.
$1 = INR 63.97