Local Indian cold rolled coil (CRC) prices have remained stable for the second consecutive week at INR 45,500/mt ($652/mt) ex-work, amidst sluggish market conditions, slow stock movements at both steel mills and market intermediaries, and low bookings by end-users, traders said on Tuesday, June 18.
“As concerns over Indian manufacturing sector growth outlook rises, end-users and market intermediaries are getting extremely cautious and lowering their bookings and keeping a sharp watch on inventories,” a Mumbai-based trader said.
“Unlike a month ago, the market is also discounting the possibilities of a fiscal stimulus to growth from the forthcoming national budget next month and, hence, the bearish trend seen in the market,” the trader added.
According to a steel sector analyst with a Mumbai-based financial advisory firm, local CRC prices still face a significant downside risk even with local steel mills tying to hold the base prices firm in view of rising input costs.
The analyst said that one of the biggest bearish indicators were data which showed negative automobile sales over the past six months and a 16 percent decline in May this year, and similar sluggish sales of consumer durables, which would suggest that manufacturers will continue to remain cautious as regards raw material bookings.
$1 = INR 69.81