A softening of sentiments has emerged in the local Indian cold rolled coil (CRC) market during the past week, with base prices remaining unchanged, though premiums have largely been withdrawn amid a slowdown in trading activity and fresh bookings by end-users, traders said on Monday, January 25.
The traders said that tradable prices are almost at a par with the unchanged base prices of integrated steel mills at INR 60,000-60,500/mt ($821-826/mt) ex-works, while sellers have been pulling back premiums of around INR 1,500/mt ($21/mt) and above reported in earlier weeks in order to keep pushing volumes in a low-activity market.
“Short-term variations in CRC prices will impact differently on different integrated producers. Some steel mills have higher production volumes earmarked at contract prices, which still will remain high. But mills which have higher volumes allocated for spot sales will see per ton realizations decline in the short term,” an official at Jindal Steel and Power Limited (JSPL) said.
“End-users are making fresh assessments of their stock position as the year-end nears, and this possibly has slowed down fresh bookings. Demand revival is steady and will minimize risks of a strong correction gaining momentum. We are not much concerned over weekly or even monthly price variations within a narrow range as seen over the past week,” the official said.
According to a steel sector analyst with Mumbai-based financial advisory firm, most leading passenger car makers reported double-digit year-on-year sales growth in December, contrary to the usual trends of dips as the year-end approaches, indicating demand is being sustained.
The analyst said that a positive national budget placed before parliament next week would reverse the slight negative sentiments that have set into the market at present.
$1 = INR 73.00