Local Indian cold rolled coil (CRC) prices have remained stable during the past week at INR 39,500/mt ($523/mt) ex-works, as sentiments showed slight improvements in response to the green shoots of small-volumes bookings reported by select auto and consumer durable manufacturers, traders said on Monday, June 8.
Even though bookings for integrated steel mills have remained at a negligible level, a few stand-alone re-rolling mills based in the western region are reported to have concluded bookings of small-to-medium volumes from South Korean and Chinese automobile manufacturers based in the western and southern regions.
The traders said that, even though the new bookings were modest, the very fact of key buyers resuming raw material restocking even if it is not expected to be sustained has helped the market to maintain CRC prices.
A number of market participants and producers have said that CRC sales in the local market are unlikely to see any sharp revival in the medium term as, despite several rounds of discussions between key consuming industries like automobile and the government, the latter is unlikely to announce a specific revival package for the industry.
The automobile industry, which was already on a decline of about 18 percent before the pandemic, is expected to decline by 30-35 percent during the current fiscal year when national Gross Domestic Product (GDP) growth is forecast to be negative.
Integrated steel mills or stand-alone rolling mills have limited strategic elbow room in the case of the CRC product segment as India is not a major exporter and the only option has been to reduce captive conversion of these products to keep supply pressures on prices in check.
Market sources said that, even though official prices have been maintained at least two re-rolling mills are reported to have concluded bookings at discounts of 2-5 percent, indicating a persistent lack of appetite among key user industries.
$1 = INR 75.50
