Local Indian cold rolled coil (CRC) prices have remained unchanged during the past week at INR 43,500 ($608/mt) ex-works, as the market has taken a break from nine consecutive weeks of gains after disappointment with the national budget which did not have anything specific to boost CRC demand, SteelOrbis learned on Monday, February 3.
According to traders, the steady rise in prices seen over the previous weeks has now entered a downside risk zone as the government budget did not have any specific measure to boost demand in key consuming sectors like automobiles.
“The part of demand which we are not seeing growing yet is automobile. That sector accounts for 15 percent of steel consumption and I do not see much on that front,” Tata Steel CEO T. V. Narendran said in a statement.
Market sources said that, with the government not offering any direct measure to reverse steadily falling auto sales, doubts have emerged in the market whether the gains recorded by CRC prices over the past several weeks will be sustained and also whether local steel mills can now go ahead with the planned base price hike for February deliveries.
At least two traders said that, in the absence of any government stimulus and auto sales showing no signs of reversing their falling trend, local CRC prices can be expected to pass through a stagnating trend, while a section of the market even expects a downward price correction of at least INR 500/mt ($7/mt) as they consider that prices have moved up too rapidly amid sluggish demand.
$1 = INR 71.50
