Downward pressures have begun to be observed in the local Indian cold rolled coil (CRC) market with prices edging down by INR 500/mt week on week to INR 53,500/mt ($727/mt) ex-works against the backdrop of the slight uptick in imports and a correction showing signs of emerging, traders said on Tuesday, October 30.
“With prices at a historical high, the market is expected to experience a correction. The downtrend in prices is also likely to force local steel mills to defer the expected base price hike next month. Or so the market expects,” a Mumbai-based trader said.
“At the same time, with the rupee taking a break from depreciating against the US dollar and stabilizing below the INR 74 to the dollar mark, importers are gaining confidence as regards concluding contracts for inward shipments, which is also adding to the pressure on prices,” the trader added.
According to a steel sector analyst with a Mumbai-based financial advisory firm, rising oil prices are having an impact on overall demand in the manufacturing sector.
The analyst said that rising oil prices would also keep demand in the automobile sector at low levels and the usual surge in demand during the current festival season is likely to be elusive, adding to the woes of the industry which has already recorded a fall in sales over the last two consecutive months, and this is expected to further reduce the off-take of CRC.
According to the analyst, if Indian steel mills desist from hiking base prices for November deliveries, local CRC prices hold a further downside risk of around INR 500/mt in the short term.
$1 = INR 73.59