Local Indian cold rolled coil (CRC) prices have continued to inch lower amid thin trading conditions and recent base price reductions seemingly being insufficient to trigger fresh buying, while key user sectors have been increasingly looking towards cheaper imports for limited restocking, SteelOrbis has learned from trade and industry circles on Monday, May 15.
Indian benchmark 0.9 mm CRC prices are down a marginal INR 100/mt ($1.21/mt) to INR 62,900/mt ($765/mt) ex-Mumbai and are down INR 200/mt ($2/mt) to INR 60,850/mt($718/mt) ex-Chennai in the south.
“Overall domestic sales of flat products are falling on month-on-month basis. There is also a pile-up of inventories as fewer users have concluded long-term supply contracts for the next two quarters. Moreover, passenger car makers led by South Korean brands have almost moved entirely to import sourcing, which is easier in terms of shorter inventory management,” a Mumbai-based distributor said.
“We are hearing that at least some integrated mills are considering curtailing capacity utilizations of their rolling mills to attempt to stabilize the market on the supply side. But this can be expected to have a minimal impact considering the low demand and rising imports of even relatively small tonnages,” he said.
According to a steel sector analyst at a Mumbai-based financial advisory firm, domestic mills will definitely be forced to look at further cuts in base prices. However, the size of the cut and timing will be determined by input costs and whether curtailing output has any impact on stabilizing trade prices.
However, he still forecast a base price reduction of around INR 1,000/mt ($12/mt) before mid-June as movement of stocks from mills to the market is really slow.