Local Indian cold rolled coil (CRC) prices have edged lower as large consumers, led by automobile manufacturers, have continued to stay out of the market. Meanwhile, re-rollers are heard to have concluded small-volume trades at discounted prices amid mounting inventories.
Sources said that benchmark the 0.9 mm CRC price lost INR 300/mt ($3/mt) to INR 55,000/mt ($638/mt) and is down INR 300/mt ($3/mt) to INR 59,500/mt ($689/mt) ex-Chennai in the south.
According to sources, at least two major passenger car manufacturers declined to lift volumes in July under their long-term contracts with re-rollers, prompting the latter to divert the surplus to merchant sales at discounts of up to INR 1,000/mt ($12/mt).
Passenger car sales in June fell to an 18-month low and are unlikely to improve during the ongoing monsoon season, which is expected to last until the end of October. As a result, manufacturers remain largely absent from the market, leading to negligible trade volumes. At the same time, at least three major mills have resumed production over the past month following maintenance shutdowns, adding to supply-side pressure, the sources added.
“Not only is the mood in the market gloomy, but there are also not many rays of hope either in the short term. We do not see any revival ahead at least till October when the monsoon rainy season ends. Even going ahead, there are headwinds of fundamental demand weakness across the manufacturing sector and liquidity challenges for market intermediaries,” a Mumbai-based distributor told SteelOrbis.
$1 = INR 86.26