Local Indian cold rolled coil (CRC) prices have remained stable over the past week at INR 44,500/mt ($662/mt) ex-works, as trading activity in the market has nearly come to a standstill after the Indian government banned circulation of higher-value currency notes in the country, traders said on Tuesday, November 15.
Market sources said that the market is gripped by nervousness and uncertainty after the Indian government banned circulation of INR 500 and INR 1,000 currency notes in the country with effect as of November 8 and amid the subsequent chaos with bank limits on daily withdrawals of cash and ATMs across the country running dry of cash.
Since the ban on circulation of high-value currency notes, the whole banking system has been thrown into disarray with hordes rushing to banks to exchange these notes and with the banks running dry of lower-value currency notes.
Traders said that they are left with virtually no cash and have stopped making any fresh bookings, apprehensive how the recent government will move unfold and what its short-term and long-term impact on the market and the economy will be.
The traders pointed out that, while basic transactions in the markets involve cheques or electronic payments, market intermediaries need to make cash payments for logistics and infrastructure costs like loading and unloading, truck charges and other expenses and with no cash available dealers are in no position to make deliveries.
$1 = INR 67.73