Local Indian cold rolled coil (CRC) prices crashed by INR 1,000/mt ($13/mt) to INR 40,000/mt ($527/mt) ex-works as expectations of revival in demand took a big hit during the past week on reports that at least two major automobile manufacturers on course in resuming production were impacted by emergence of Covid-19 cases among its workforce, SteelOrbis was informed on Monday.
According to traders, even as demand revival was expected to remain on a slow track, fresh uncertainties over automobile manufacturers resumption of operations have emerged following workers reporting Covid-19 and it was response from the companies and government authorities on immediate course of action were still awaited.
Also the fact that the government has not yet responded to any of the measures sought as bail out for the auto industry aggravated negative outlook and while plants had resumed operations companies were unlikely to ramp up output and hence the market completely discounted any significant raw material restocking from the industry.
At least two traders said that even after lowering of base price, additional discounting ranging 2-5 percent failed to result in significant volume bookings reported by integrated steel mills.
“We will soon have to take a re-look again at capacity utilizations of our rolling mills. Under current market conditions, we have to take measured steps for each product segments. As bookings for CRC belied expectations in wake of end users’ manufacturing plants resuming operations it makes little sense in recent moves to increase CRC rolling mill output in phased manner,” a seller said.
$1= INR 75.95