Local Indian cold rolled coil (CRC) prices have continued to suffer setbacks during the past week amid minimal buying interest, with leading industrial users like automobile and packaging material manufacturers pausing restocking and with re-rollers focused on extending discounts and credit terms for inventory liquidation.
Sources said that the 0.9 mm benchmark CRC price is down INR 500/mt ($6/mt) to INR 54,500/mt ($631/mt) ex-Mumbai and has lost INR1,000/mt (12/mt) to INR 58,500/mt ($677/mt) ex-Chennai in the south.
According to sources, re-rollers are heard to be offering an aggressive discount ranging at INR 2,000-2,500/mt ($23-30/mt) to keep sales alive, after facing a steady increase in inventories.
Several buyers on long-term supply agreement with western India-based standalone re-rollers are defaulting in lifting stocks as per pre-determined schedules, leaving the latter with surplus stock inventories which they are forced to sell at deep discounts, the sources added.
“The mood in the market is very bad. There is hardly any buying activity. The situation is unlikely to improve as July will be another month during which passenger car makers will see negative sales growth or at best very low single-digit growth. This will ensure prolonged absence of raw material restocking,” a Mumbai-based distributor told SteelOrbis.
“Market intermediaries are hoping for some market support initiatives by mills in August. But we think this is unlikely as producers will not sacrifice margins by lowering base prices. Instead, they are more likely to adopt offering discretionary discounts,” he added.
$1 = INR 86.46