Local Indian cold rolled coil (CRC) prices have remained stable at lower levels amid thin trading and persistent reports of end-users deferring lifting stocks, reacting to the slowdown in demand growth in key industries such as the automotive and consumer durables sectors, SteelOrbis learned from trade and industry circles on Monday, February 5.
Sources said that benchmark 0.9 mm CRC prices are unchanged at INR 61,700/mt ($742/mt) ex-Mumbai and are stable at INR 62,450/mt ($751/mt) ex-Chennai in the south.
They said that, not only have large industrial users been cautious in restocking, but several users in the automotive sector have also continued to default on lifting stocks as per schedule under long-term supply agreements, with rerollers forcing the latter to divert more volumes to trade channels.
“Even though automobile manufacturers posted strong growth in sales in January, the best may be coming to an end, and it will be a challenge to maintain the growth rate following the price increases effective across product ranges and hence companies are being very conservative when booking raw materials,” a Mumbai-based distributor said.
“South Korean car companies operating in India prefer imports over domestic sourcing as the former is still roughly 8-12 percent cheaper on landed-price basis.
Demand from southern India-based specialized steel container manufacturing industries is also reported to be very weak, depressing overall market sentiments,” he said.
$1 = INR 83.20