Local Indian CRC prices decline for fifth consecutive week

Tuesday, 23 July 2019 14:02:45 (GMT+3)   |   Kolkata

Over the past week, prices in the local Indian cold rolled coil (CRC) have remained under pressure for the fifth consecutive week, decreasing by INR 500/mt to INR 43,000/mt ($623/mt) ex-works, in reaction to the persisting bearish mood among end-users and sustained import pressures even from low-volume inward shipments, traders said on Tuesday, July 23.

“Both the medium- and long-term outlooks for the CRC market are extremely negative. Key demand drivers in sectors like automobile manufacturing and consumer durables have taken a big hit from falling sales for several consecutive months and these sectors are drastically cutting down on their raw material bookings to check inventories,” a Mumbai-based trader said.

“Market intermediaries are also unwilling to restock as the slowdown in stock movement will result in cash being locked up, leading to liquidity problems for the traders,” the trader added.

At least two other traders confirmed that some western India-based distributors have begun offering discounts of arouhd INR 500/mt to liquidate inventories in order to lower stock-carrying costs and alleviate cash flow problems since stocks are just not moving.

“Fresh bookings have also dried up because of month-end considerations and traders have preferred to wait and watch the pricing strategy of local steel mills for August deliveries. The market is not sure whether the steel mills will adjust prices in view of rising inventories and slow stock movements but the general consensus is that the mills will maintain base prices unchanged and will be unwilling to sacrifice margins. But a final decision will largely hinge on whether current pressures from import shipments being faced by local steel mills are sustained over the coming weeks,” the two traders observed.

$1 = INR 68.95

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