Is correction on horizon for local Indian CRC prices?

Local Indian cold rolled coil (CRC) prices have showed no changes during the past week, remaining at INR 49,500/mt ($816/mt) ex-works amid little buying activity and negligible import transactions, traders said on Thursday, August 14.
 
According to two Mumbai-based traders, the market is lacking any direction and dealers are reluctant to increase inventories as sentiment has been affected by lower than expected industrial growth across the manufacturing sector.
 
"Domestic steel mills have continued to defer price increases as they are not sure whether current market conditions would absorb higher prices. Transactions volumes are therefore at a low level as dealers are postponing new orders until they are sure of prices and demand conditions," a trader said.
 
"However, negligible import transactions have provided support for local prices with the rupee continuing to weaken below the INR 61 to a dollar mark," the trader added.
 
Market sources said that sentiment has been affected by government data released this week which showed that industrial production slowed down to 3.4 percent during June, compared to five percent during May, and this negatively impacted market expectations of a demand uptick and support for local CRC prices.
 
The sources said that flat products have already reacted to the slowdown in industrial production, falling by an average of INR 2,000/mt ($32/mt) over the past two months, and it is only a matter of time before flat product prices will react to the current sluggish demand.
 
 
$1 = INR 60.83