Local Indian cold rolled coil (CRC) traded prices have slumped in anticipation of imminent base price cuts by producers and reports of end-users deferring deliveries from re-rollers against their long-term supply contracts, leading to inventory pressures, SteelOrbis has learned from trade and industry circles on Monday, December 20.
The traded prices of 0.9 mm benchmark CRC have lost INR 2,300/mt ($30/mt) to INR 70,000-70,500/mt ($921-928/mt) ex-Mumbai, while some deals even lower at INR 69,500/mt ($914/mt) have been heard around the southern regional market of Chennai.
“Several companies in the automobile industry are revising downward their targeted production due to the extended shortage of imported components. Passenger car price hikes announced for January will also temper sales. Hence, many of those companies having long-term supply contracts with re-rolling mills are deferring deliveries, leaving a lot of surplus material in the market, putting pressures on prices,” a Mumbai-based steel distributor said.
“Dealers are also not willing to commit fresh bookings with producers expected to cut base prices by at least INR 4,000/mt ($53/mt), which the government is advising steel companies to do,” he said.
Sources citing industry reports said that two of the largest passenger car makers, Maruti Suzuki India Limited (MSIL) and Hyundai Motors India Limited (HMIL), have a backlog of deliveries of 250,000 and 100,000 units, respectively, owing to component shortages, and will have to clear these from existing raw material inventory stocks before carrying out any further restocking for incremental production.
$1 = INR 76.00
