Over the past week, prices in the local Indian cold rolled coil (CRC) market have remained stable at INR 49,000/mt ($699/mt) ex-works, with domestic steel mills having decided to keep base prices unchanged for current month deliveries even though trading activity has dipped with dealers unwilling to make fresh bookings at higher levels, traders said on Tuesday, January 8.
“Expectations of price adjustments in view of high mill-end inventories have been belied. Most market intermediaries are unwilling to make fresh bookings as there is a lot of material available across market segments and end-users having little appetite to increase their stocks,” a Mumbai-based trader said.
“With supply-side pressures persisting, I would anticipate that dealers will have no option but to start discounting to keep stocks moving. Such discounts are expected to emerge later in the month as no demand side uptick is anticipated by the market,” the trader added.
According to a steel sector analyst with a Mumbai-based financial services firm, local CRC prices have a downside risk of around INR 1,000/mt in the short term and this could be triggered by fresh discounts on offer as most dealers would be keen to liquidate stocks and improve cash flows with the financial year coming to a close on March 31.
$1 = INR 70.07