Local Indian cold rolled coil (CRC) prices have showed a mixed trend with a negative bias, in a market lacking direction and major consuming sectors like automobile reporting divergent fortunes and uncertainties over the short-term demand outlook, SteelOrbis learned from trade and industry circles on Monday, October 4.
The traded price of the benchmark 0.9 mm CRC have been maintained at INR 72,000-73,000/mt ($975-990/mt) ex-Mumbai; however, lower prices have been reported in the south at around INR 71,000-72,000/mt ($962-975/mt) ex-Chennai.
High value-added thinner gauge (0.2-0.35mm) CRC prices have remained stable at INR 75,000-77,000/mt ($1016-1043/mt) ex-Mumbai, trading sources said.
There is a lot of uncertainty over the short-term trend of fresh bookings in view of the contrasting fortunes of automobile companies. For example, the largest domestic passenger car manufacturer Maruti Suzuki India Limited (MSIL) has reported a 57 percent fall in September sales, while Tata Motors has reported a sales increase of 27 percent in the month, sources said.
The shortage of imported components like microchips is impacting manufacturers differently and as a result it is a challenge to forecast bookings. Some companies have re-negotiated long-term supply contracts with re-rolling mills deferring offtake schedules, and this means there is excess supply floating in the CRC market, putting traded prices under pressure.
In the festive season of October and November, passenger car demand will outstrip supplies and it is a sellers’ market, sources said. The question is how each manufacturer is geared to meet demand and overcome the component shortage, and this will drive CRC prices, a Mumbai-based trader said.
“Our assessment is that local CRC prices will move in a narrow range in absence of a definitive direction in the market. Also, it needs to be watched whether mills increase base prices for October despite slow stock movements,” he said.
$1 = INR 73.80
