Local Indian cold rolled coil (CRC) trade prices have edged lower as sentiments became more bearish amid unconfirmed negative reports coming in from the start of long-term supply contract negotiations between re-rolling mills and buyers for the January-March period, SteelOrbis learned from trade and industry circles on Monday, November 14.
Sources said that benchmark 0.9 mm CRC trade prices are down INR 200/mt ($2/mt) to INR 63,400/mt ($785/mt) ex-Mumbai and are down INR 500/mt ($6/mt) to INR 63,000/mt ($780/mt) ex-Chennai in the south.
“At least two large standalone re-rolling mills are reported to have started long-term supply contract talks for the fourth quarter of the current fiscal year with auto manufacturers. Sentiments in the market are affected by a lot of unconfirmed negative information coming from such talks,” a Mumbai-based distributor said.
“We are hearing that auto companies are seeking a significant reduction in contract prices. This is surprising the market since auto companies have reported some of the best sales performances in recent years and have announced price increases for commercial and passenger vehicles. At the same time, there is speculation that re-rolling mills will increase sourcing of imported hot rolled coil (HRC), which is currently priced very competitively against local material, to be able to meet lower prices being sought by buyers,’ he said.
Market participants are expecting local mills to reduce base prices by at least INR 1,000/mt ($12/mt) in December, contributing to a fall in movement of stocks in trade channels, at least two traders said.
$1 = INR 80.80
