Indian integrated steel mills have cut cold rolled coil (CRC) base prices during the past week attempting to counter the weakening of demand from key sectors like automobile manufacturers and consumer durables and to pass on the benefits of the fall in prices of hot rolled coil (HRC), SteelOrbis has learned from trade and industry circles on Monday, March 8.
The sources said that producers have pruned base prices by INR 1,500/mt ($21/mt) to INR 58,500-59,500/mt ($801-815/mt) ex-works and that the tradable price is reported to be at the same levels with premiums being withdrawn by sellers.
Sources said that producers are seen to be proactive in driving demand, which is seeing signs of weakening from the automobile industry, with passenger car makers having to revise their earlier plans to increase production in the face of the shortage of imported electronic components and the general unwillingness to conclude supply contracts at the current high prices.
There has also been a slowdown in the movement of stocks from mills to the market as buyers are expecting a government intervention of some kind to ease steel price increases, and large buyers who typically start negotiating six-month supply contracts are reported to be deferring such negotiations, depressing sentiments and forcing dealers to stay away from fresh bookings.
“The market has been caught by surprise by integrated steel mills taking cognizance of the slowdown in the market as they have been enjoying pricing power for the past several months. A greater number of market participants are heard to be saying that pent-up demand post-national lockdown last year has largely run its course and the market is finding a balance at a lower demand point,” a Mumbai-based trader said.
$1 = INR 73.00