Local Indian cold rolled coil (CRC) prices showed a mixed trend amid overall negative sentiments and low trade activity with slight price increases seen in regional markets attributed to localized factors like challenges in logistics.
Sources said that benchmark 0.9 mm CRC price was stable at INR 57,000/mt ($661/mt) ex-Mumbai but edged up slightly by INR 400/mt ($5/mt) at INR 60,900/mt ($707/mt) ex-Chennai in the south.
According to sources, some trade level deals in the south were reported at higher levels with few distributors increasing prices to meet immediate delivery requirements amid some disruptions in road transport system in the region.
Dismissing regional price gain as an aberration, most market participants pointed out rerollers reporting higher inventories and large passenger car makers reducing output levels during sluggish monsoon season sales period, a combination of which would continue to keep prices under pressure.
They said that under such market conditions, CRC prices continue to face downside risk of another INR 1,000/mt ($12/mt) from current trade levels.
“Both mood and outlook in the market is very poor. The market will remain in the negative zone for 2-4 months. With weak fundamentals of demand, we do not expect a rebound. Of course, some market participants are holding some optimism from chatter that the government is planning to increase safeguard duty from 12 percent to 24 percent,” a steel sector analyst with a Mumbai based financial advisory firm told SteelOrbis.
“However, even if this becomes a reality, we do not see a major impact. In May, total steel imports declined by 40 percent month-on-month, after one month of imposition of the 12 percent safeguard levy. So, steel prices have been declining despite lower imports. This reflects weak fundamentals of demand weighing and driving the market much more than imports on the supply side,” he added.
$1= INR 86.15
