Local Indian cold rolled coil (CRC) have continued to soften reacting to base price cuts by mills, but the rate of the decline has slowed compared to early in the month on the back of some modest restocking by end-users and a brief halt in import bookings, SteelOrbis learned from trade and industry circles on Monday, June 12.
Sources said that benchmark CRC trade prices are down INR 500/mt ($6/mt) to INR 60,300/mt ($731/mt) ex-Mumbai and are down INR 700/m ($8/mt) to INR 59,150/mt ($717/mt) ex-Chennai in the south.
They said that fresh bookings by specialized metal packaging manufacturers checked the sharp downward movement in prices, but other major industries like automotive continue to remain out of the market, leading to extended overall bearish market conditions.
“The brief halt in import bookings also contributed to somewhat checking the loss in prices. But our assessment is that this is temporary as the automobile industry is fully stocked for the lean monsoon season. Cheap imports will continue to put pressure on the local market once the busy season commences from September onwards. In the meantime, the market will remain volatile,” a Mumbai-based distributor told SteelOrbis.
“Trade channels returned to restock over the past week, but very cautiously, and for small tonnages. Not only are stocks moving slowly, but market intermediaries are also facing severe challenges of liquidity as borrowings from lending institutions are tight and costs rising, with limited volume bookings,” he added.
However, a section of producers has maintained a more optimistic outlook largely expecting to gain from higher-volume sales rather than improvements in per mt realizations.
“It is true that there is rising pressure from imports. But, overall, we think that continued high government expenditure will ensure positive demand growth. Producers will need to adjust to changes in market dynamics from prices leveraged to push higher-volume sales,” an official at a government mill said.
“Automobile sales reached a peak in May. Some industries are cyclical with raw material demand variations. But in the medium term, demand will remain robust at around 13 per-cent, enabling mills to push higher volumes in the market, even as prices remain under pressure,” he added.
$1 = INR 82.50