Local Indian cold rolled coil (CRC) prices have remained stable amid thin trading activity owing to holidays and the muted demand from key user industries, as overall manufacturing slows down during the national election period of April to June.
Sources said that benchmark 0.9 mm CRC prices have remained stable at INR 61,200/mt ($736/mt) ex-Mumbai and are unchanged at INR 62,250/mt ($748/mt) ex-Chennai in the south. But trade channels in the western and southern regional markets are heard to be concluding even small-volume deals at discounts ranging at INR 1,500-2,000/mt ($18-24/mt), indicating weak demand and oversupply from re-rolling mills.
According to an analyst at a Mumbai-based financial advisory firm, prices will continue to be weighed down by the slowdown in industrial growth at 3.9 percent in January (as per latest available government data) down from 4.5 percent in January 2023 and the trend will cause industrial users to reduce raw material offtake going forward.
At the same time, national elections in April-June will force industries to cut back on output from low demand, while there will be a shortage of workers as migrant labourers head home to cast their votes in their place of registration, he said.
“The price stability seen over the past few weeks does not reflect the reality as the stability is rooted in the fact that re-rollers have completed year-end stock liquidation and not because of improved demand. Our assessment is that downside risks will resurface again in the first quarter of the new fiscal year of 2024-25,” a Mumbai-based distributor told SteelOrbis.
$1 = INR 83.20
