Local Indian cold rolled coil (CRC) traded prices have continued to fall, with buyers on long-term contracts persisting in deferring deliveries, with the mixed December automobile sales trends failing to improve sentiments, exerting inventory pressures on producers, and with market expectations of base price cuts in the current month, SteelOrbis learned from trade and industry circles on Monday, January 3.
Local benchmark 0.9 mm CRC traded prices have declined by INR 1,400/mt ($19/mt) to INR 66,600-67,100/mt ($896-903/mt) ex-Mumbai, while the traded price was heard at INR 66,000/mt ($888/mt) ex-warehouse in the southern regional market of Chennai, down from INR 67,500/mt ($908/mt) ex-warehouse.
According to sources, re-rolling mills have been pushing higher volumes into trade as buyers under long-term contracts were still deferring deliveries as the expected upturn in passenger car sales is still tentative and companies were slow in increasing assembly line outputs.
“The CRC price is declining faster than the hot rolled coil (HRC) price and mills are therefore forced to lower volumes for captive re-rolling to avoid inventory build-ups. With new restrictions coming in force in major industrial hubs around Mumbai in the west and Delhi in the north, rising risks of supply-chain disruptions are impacting sentiments once again,” a steel sector analyst with a Mumbai-based financial services advisory firm said.
“At the retail end, distribution channels between manufacturers and dealers along with restrictive movements of people are starting to impact overall business and industrial activity. Buyers are hence unwilling to commit fresh bookings and are limited to only need-based procurement of raw materials,” he added.
At least two market participants have claimed to have received indications from two leading integrated mills about base price reductions in the range of INR 2,000-3,000/mt ($27-40/mt) for January deliveries, prompting even the few buyers to defer bookings.
$1 = INR 74.30