Local Indian cold rolled coil (CRC) prices have suffered further setbacks from continuing oversupply, resulting in stock liquidation even as large end-users are bringing restocking down to a bare minimum.
Sources said that benchmark 0.9 mm CRC prices have lost INR 1,100/mt ($13/mt) to INR 57,400/mt ($684/mt) ex-Mumbai and are down INR 750/mt ($9/mt) to INR 57,750/mt ($688/mt) ex-Chennai in the south.
They said that end-users led by automobile manufacturers have almost stopped restocking. Most passenger car makers have been faced with large inventory buildups at dealers and are operating their assembly lines at much reduced output levels and hence they have not been willing to conclude fresh raw material bookings.
“It is noted that South Korean car companies with manufacturing bases in the country are preferring to import from their home country, at a 5-12 percent lower landed cost compared to current local CRC trade prices. Hence, re-rollers are facing mounting inventories and are diverting to local sales at discounts,” a Mumbai-based distributor told SteelOrbis.
“All eyes are now on the festival season of October-November during which goods tend to move faster in the market. But in our assessment the festival season boost in demand will only balance out the very high level of inventories seen now. It is unlikely to result in incremental demand,” he added.
$1 = INR 83.90
