Local Indian cold rolled coil (CRC) prices have staged a recovery during the past week, moving up INR 350/mt ($5/mt) to INR 37,450/mt ($527/mt) ex-works as domestic steel mills hiked base prices amid a fall in inventories, SteelOrbis has been informed.
According to traders, most large Indian steel mills have been able to bring down inventories over the past few months through aggressive discounting and are now attempting to push up prices, hoping for some demand revival over the next quarter.
“It is still not clear whether higher price levels will be sustained after producers have pulled back all discounts, because major consuming sectors like automotive are still in a deep demand depression. Steel mills are increasing base prices amid expectations of a demand revival in the next quarter rather than any definite change in the fundamentals in consuming industries,” a Mumbai-based trader said.
Traders have pointed out that the automobile manufacturing sector is still giving mixed signals with data indicating that, while passenger car sales staged a marginal positive increase of 0.28 percent during October, total sales of all vehicles was down 12 percent during the month, showing that aggregate demand for CRC could continue to remain at low levels, and hence the increase in prices has come against the backdrop of very thin trading volumes in the market.
$1 = INR 71.10