Declines in local Indian cold rolled coil (CRC) trade prices have gained further momentum amid excess supplies from re-rolling mills and major industrial consumers reducing restocking anticipating an overall economic slowdown, continued inflationary pressures, and a lack of confidence in maintaining sales growth in the last quarter of the fiscal year, SteelOrbis learned from trade and industry circles on Monday, December 12.
Indian benchmark 0.9 mm CRC prices are down INR 1,800/mt ($22/mt) to INR 60,300/mt ($733/mt) ex-Mumbai and down INR 2,000/mt ($24/mt) to INR 59,250/mt ($719/mt) ex-Chennai in the south.
“Negative sentiments in the market have been on the rise ever since reports came into the market of re-rolling mills concluding long-term supply contracts at a deep discount to previous contracts. Clearly there is a surplus of material at integrated mills and rolling units,” a Mumbai-based distributor said.
“Key user industries like automobile are extremely cautious in booking raw materials despite having recorded the highest-ever monthly sales growth in November. Industries feel that it would be difficult to maintain sales growth levels as auto manufacturers have all announced January price hikes. Coupled with the rise in interest rates and the resultant increase in consumer financing costs, sales growth will face strong headwinds from January onwards, and hence bookings of raw materials are being kept low,” he said.
At least two officials at private mills have confirmed that they have reduced allocations for use at their captive rolling mills as there are sufficient CRC stocks to meet the projected demand in the last quarter.
$1 = INR 82.30
