Local Indian cold rolled coil (CRC) prices have come under renewed pressures losing INR 200/mt ($3/mt) over the past week to INR 39,000/mt ($515/mt) ex-works. Steel producers are expecting lower off-take by automobile manufacturers, impacted by fears of supply chain disruptions from China, SteelOrbis was informed on Monday, June 29.
Supply chains of auto manufacturers are beginning to be disrupted by both China and India holding back trade consignments at ports and steel mills expect that this will result in lower-than-expected restocking of CRC as automobile manufacturers will be forced to lower output of their assembly lines.
Reports indicate that the domestic auto industry’s disruptions of critical component supplies from China will worsen over the next few months in view of the retaliatory trade measures of India and China and, under these circumstances, the industry will be have to re-assess production targets, and hence fresh bookings of CRC which are already at low levels will fall further and exert fresh pressures on local CRC prices.
Market sources said that a leading re-rolling mill concluded a booking with a southern Indian steel mill at a discounted price of 3-5 percent during the past week and, while the sources pointed out that this is yet to become widespread, any further fall in trading volumes would either lead to lower captive conversion to CRC or would push discounted sales volumes, depending on inventory pressures at respective steel mills.
$1 = INR 75.70