Local Indian CRC market takes a break from downtrend but pessimism persists

Tuesday, 14 May 2019 16:22:35 (GMT+3)   |   Kolkata

The downtrend in the previous three weeks in the local Indian cold rolled coil (CRC) market has been checked during the past week with prices remaining stable at INR 46,000/mt ($654/mt) ex-works, but a negative bias persisted in the market with a sharp fall in trading activity and fears of an industrial slowdown, traders said on Tuesday, May 14.

“The combination of a slowdown in industrial growth reflected in government data and local steel mills not factoring in slow stock movements by adjusting base prices have prompted intermediaries to bring restocking down to a bare minimum,” a Mumbai-based trader said.

“At the same time, key large end-users like automobile manufacturers have sharply lowered raw material purchases, reacting to a 16 percent plunge in auto sales across categories in April and the sharpest fall in the last ten years. Such data has triggered extreme pessimism in the market,” the trader added.

Market sources said that capital goods manufacturing declined by 8.7 percent year on year in March this year, with such data indicating that the slowdown in consumption and industrial growth is becoming deeply entrenched and that a turnaround is not viable in the medium term.

Against such a backdrop, dealers are unwilling to build up inventories by restocking at current high CRC prices, the sources added.

$1 = INR 70.34


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