Downward pressures have continued unabated for the sixth consecutive week in the local Indian cold rolled coil (CRC) market with prices decreasing by INR 1,000/mt week on week to INR 50,500/mt ($703/mt) ex-works, amid a combination of rising inventories at steel mills and rising political uncertainty, traders said on Tuesday, December 11.
“Up to now, the prolonged downtrend in the market has been largely due to rising inventories at steel mills and tepid export shipments. To this bearish element have been added political uncertainties,” a Mumbai-based trader said.
Market sources said that the resignation of the governor of the Indian central bank, the Reserve Bank of India (RBI), on Monday, presumably owing to a conflict with the federal government, risks creating turmoil in the financial sector.
At the same time, election results in states coming out throughout today, December 11, indicate that the present government in New Delhi will face a serious challenge in the Indian national elections due in a few months’ time and this has impacted overall sentiment in the market and has added fuel to the already bearish trends.
The sources pointed out that, with CRC prices nose-diving by INR 3,000/mt over just the past two weeks, speculation has been triggered that local steel mills will be forced to revise base prices for the second time in December to check rising inventories.
$1 = INR 71.79