Local Indian cold rolled coil (CRC) prices have continued to decline for the fifth consecutive week, moving down by INR 200/mt ($3/mt) week on week to INR 42,000/mt ($551/mt) ex-works, as sentiments have been impacted by the forecast from the automobile industry, a major end-user, that car sales are unlikely to reverse their declining trend for at least for the next two to three quarters.
Even though local steel mills have deferred decisions on any changes to base prices for the current month until there is clarity on new lockdown restrictions, pricing changes to drive stock movements have lost relevance as the automobile industry is forecasting a long slow revival even as the impact of Covid-19 eases over the next few months.
The traders said that, with both the consumer durables and automobile industries ruling out any revival in the short and medium terms, fresh CRC bookings will continue to remain at minimal levels, forcing integrated steel mills to further lower utilizations of their re-rolling mills.
“We expect most integrated steel mills to marginally lower base prices either during the last fortnight of current month or next month. Re-rolling mills have to be kept operational even at lowest capacity utilizations to recover fixed costs and prices will need to be adjusted to keep stocks moving in depressed market conditions,” a source said.
$1 = INR 76.17
