Local Indian cold rolled coil (CRC) prices have edged up by INR 200/mt week on week to INR 44,000/mt ($672/mt) ex-works, amid expectations of lower import competition, traders said on Tuesday, November 14.
“Sale and demand continue to be sluggish. However, prices are edging up amid expectations that imports will dip with the Indian currency depreciating and more users will shift to domestic CRC,” a Mumbai-based trader said. “Nevertheless, I do not think this will provide sufficient support for CRC prices to consolidate at higher levels,” the trader added.
According to two other traders, the creeping upward movement of local CRC prices reflects the market’s anticipation that domestic steel mills will revise their base prices early next month. They stated that, even though the fundamentals of demand and inventories are a cause of concern, the possibility of the Indian rupee depreciating to INR 66 to the dollar will provide a window for Indian steel mills to hike their base prices, with imports tapering off.
Market sources said that the impact of bankruptcy proceedings against Indian steel companies like Essar Steel and Bhushan Steel, key flat product producers, are expected to prune supplies to the market as these companies are already reporting a sharp downturn in production levels.
Over the medium term, lower offerings to the domestic market from these companies can bring down aggregate supplies of CRC, having a salutary impact on aggregate domestic inventories, and hence provide some support for prices, the sources added.
$1 = INR 65.5
