Local Indian cold rolled coil (CRC) prices have softened over the past week and bookings from end-use industries have eased, particularly from automobile industries where optimism on festival sales growth has tapered off, SteelOrbis learned from trade and industry circles on Monday, September 12.
The sources said that raw material restocking by automobile companies came to an early end with the industry lapsing back into pessimism after below-expected growth in sales in August.
Benchmark 0.9 mm CRC trade prices have slipped INR 600/mt ($8/mt) to INR 65,700/mt ($825/mt) ex-Mumbai and are down INR 800/mt ($10/mt) to INR 65,800/mt ($827/mt) ex-Chennai in the south.
“Most automobile companies called an early halt to raw material restocking ahead of the festival season. While supply chain issues over micro-chips have eased putting auto makers in a better position to increase output, growth in July-August sales just ahead of the festival months has impacted sentiments,” a Mumbai-based distributor said.
“Another key consuming industry, consumer durables manufacturers, are also making conservative sales growth forecasts factoring in inflation and price increases to rein in sales growth and are cautiously booking raw materials. Hence, standalone re-rolling mills are also reporting a fall in spot sales,” he said.
According to other market intermediaries, unlike other flat product segments, local CRC trade prices are still some way off from a bottom and still face downside risks of around INR 1,500/mt ($19/mt) amid the current pessimism in consuming industries for the next two months.
$1 = INR 79.60
