Local Indian cold rolled coil (CRC) prices have edged down by INR 200/mt ($3/mt) during the past week to INR 37,600/mt ($528/mt) ex-works amid inactive market conditions and negligible trading volumes, traders said on Monday, October 21.
“Market activity is almost at a standstill. Automobile and consumer durable industries are disappointed as hopes of a festival season revival have been disappointed. There is no urgency to restock raw materials from these industries,” a Mumbai-based trader said.
“Discounts on offer in the range of 10-15 percent have also failed to trigger any buying interest - so deep is the demand depression,” the trader added.
According to market sources, the double-digit negative growth in automobile sales in August and September is expected to carry over into the current month even though October as a festival month has traditionally witnessed a spike in automobile demand.
According to an official at Indian state-run producer Steel Authority of India Limited (SAIL), at current CRC prices most domestic steel producers are getting only slightly positive net sales margins, but, with raw material prices not softening to the extent expected, producers have little leeway to cut costs of production and hence have no pricing power and have to resort to discounted sales prices just to ensure a revenue stream and to meet fixed cost liabilities.
$1 = INR 71.21