Indian cold rolled coil (CRC) prices have lost ground amid negative sentiments over reports of some re-rolling mills concluding long-term supply agreements at significantly lower price levels and uncertainty over December base price announcements of mills, SteelOrbis learned from trade and industry circles on Monday, December 5.
Indian benchmark 0.9 mm CRC trade prices are down INR 500/mt ($6/mt) to INR 62,100/mt ($764/mt) ex-Mumbai and are down INR 750/mt ($9/mt) to INR 61,250/mt ($753/mt) ex-Chennai in the south.
Industry sources said that at least two large standalone re-rolling mills have concluded long-term supply negotiations (January-March) with large auto companies over the past week. But reports indicated that these contracts were finalized after protracted negotiations at prices INR 4,000-5,000/mt ($49-61/mt) lower than the previous contracts, thereby negatively impacting sentiments in trade channels.
“Long-term supply contracts at lower levels indicate that large buyers in the auto sector are extremely aggressive in containing costs even as passenger car makers have all announced January price hikes. On the part of sellers, the settlement of supply contracts at a steep discount to earlier price levels indicates excess supplies and inventories in the market,” a Mumbai-based distributor said.
“Trade channels have also reduced new bookings ahead of mills announcing new base prices over the next few days. Traders are hoping for a price cut to drive sales. But it seems unlikely, with mills claiming prices to have bottomed out and that margins cannot be put under more pressure,” he said.
$1 = INR 81.30