Local Indian cold rolled coil (CRC) prices have continued to consolidate at higher levels, gaining INR 600/mt week on week to INR 48,250/mt ($679/mt) ex-works as domestic steel mills started revising base prices and supported by lower import shipments, traders said on Tuesday, February 26.
“A few large steel mills have started hiking their base prices during the past week. This increases have ranged around INR 500/mt. The steady fall in import volumes over the past two weeks has also ensured lower competition and supported local prices,” a Mumbai-based trader said.
“What is not sure in the market is whether the base price increase commenced by local steel mills is an early call for March prices or whether the producers will go in for another price revision next month. Indications are that steel mills have gone in for a modest hike this month and will be followed up by a stiffer increase next month, and this is fuelling CRC prices and restocking by market intermediaries,” the trader added.
According to a steel sector analyst with a Mumbai-based financial advisory firm, prices are currently critically poised with the distinct possibility of a correction as they have moved up too sharply in the absence of a significant demand uptick from end-users.
However, a correction setting in would largely depend on how ex-China CRC offers trend in the short term and whether the low import competition in the local market is sustained over the next few weeks, which in turn would determine the base price strategy of local Indian steel mills during March.
$1 = INR 71.10