Local Indian cold rolled coil (CRC) prices have remained stable during the past week amid an optimistic outlook from the combination of the withdrawal of discounts by re-rollers, the anticipated increase in automobile sales during the festive season ahead, and the overall demand improvement stemming from proposed reforms of the indirect tax regime.
Sources said that benchmark 0.9 mm CRC prices have been stable at INR 55,600/mt ($636/mt) ex-Mumbai and unchanged at INR 60,100/mt ($688/mt) ex-Chennai in the south.
According to the sources, leading consumers like automobile manufacturers expect improvements in sales growth during the festival months of the September-November period and are likely to be back in the market to restock with raw materials.
At the same time, market participants have been in a buoyant mood expecting the proposed indirect tax reforms to significantly boost demand across the economy. It is learnt that the current three rates of the Goods and Service Tax (GST) of five percent, 18 percent and 28 percent would be merged to five percent and 18 percent and the highest rate of 40 percent applicable for a few ‘sin goods’ like tobacco. With most products fitted under the lowest rate of five percent, the economy could see a sharp upturn in demand, triggering the next uptrend in the steel market, the sources added.
“Even though the current market highlights are the low volume of trading and users still resorting to need-based purchases, the outlook is much more bullish. Users and intermediaries are assessing the new demand scenario and a new market trend is expected to emerge over the next several weeks,” a Mumbai-based distributor told SteelOrbis.
$1 = INR 87.34