Local Indian cold rolled coil (CRC) prices have gained in reaction to recommendations in favour of a 12 percent safeguard levy on imports, but the rise has been lower than expected as the market mood is tempered by sluggish demand from key industrial users.
Sources said that benchmark 0.9 mm CRC prices are up by around INR 1,000/mt ($12/mt) to INR 55,500-58,200/mt ($639-670/mt) with the higher levels of the range effective for ex-Chennai deliveries in the south.
It was pointed out that re-rollers have been accepting bookings at levels of INR 57,600/mt ($663/mt), higher than levels of INR 56,500/mt ($650/mt) a week ago, the source said.
While recommendations in favour of a 12 percent safeguard duty by the Directorate General of Trade Remedies (DGTR) and the ministry of finance likely to take effect shortly have improved trade prices, overall trade volumes have remained on the lower side as mood is bearish.
This was owing to market expectations that major users like the automobile industry will slow down the rate of bookings. Most passenger car makers like Maruti Suzuki India Limited, Tata Motors, Mahindra & Mahindra and Kia Motors have all announced April price increases, resulting in a further slowdown in sales growth and resulting in the depression of raw material demand.
“Mills will be increasing listed prices for April riding on the back of safeguard duty checks on imports. But our assessment is that the hike will not be very aggressive as key user industries like automobile and packaging material producers are expected to reduce bookings in the face of slow sales growth,” a Mumbai-based distributor told SteelOrbis.
“We expect the base price rise to be around INR 1,000/mt ($12/mt) and anything higher risks facing resistance in the market when demand growth is sluggish,” he added.
$1 = INR 86.90