This week Indian flat steel market opened with stable prices. With the introduction of Demonetization policy by Indian government to scrap the existing stock of INR 500 and INR 1000 denomination notes in order to curb black money has bought turmoil in the domestic steel market.
Current offers for 2.5mm HRC are assessed at INR 38,500/MT (ex-Mumbai and Delhi).While CRC offers are heard to be in the range of INR 44,500-450,00/MT (ex Mumbai and Delhi). Prices are inclusive of excise duty @ 12.5%.
However, Indian manufacturers were planning to increase the flat product prices this week but owing to short supply of cash resources no major deals have been concluded yet.
There was the drastic fall in sales volume as the market remains quiet and static last week. Indian manufacturers and traders are finding it difficult to clear out their inventories as the sudden drop in high value currencies and increased bank deposits has affected the steel consumption to a great extent.
This move by the Indian government will definitely affect the steel demand temporarily . It has the huge impact on secondary steel sector as mostly the business in this sector is done on cash basis.
Although ,there are strong speculations that prices of flat products may fall by INR 400-500/MT in near term as the market is expected to slowdown for the short span of time.
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