Local Indian cold rolled coil (CRC) trade prices have inched up, reacting to base price increases by producers, but the upside movement has been limited by the fall in trade volumes and bearish sentiments stemming from slow bookings from key end-use industries, SteelOrbis learned from trade and industry circles on Monday, February 27.
Indian benchmark 0.9 mm CRC trade prices are up a marginal INR 300/mt ($4/mt) to INR 64,300/mt ($778/mt) ex-Mumbai and up INR 200/mt ($2/mt) to INR 63,050/mt ($762/mt) ex-Chennai in the south.
Sources pointed out that, while some large integrated mills increased base prices by INR 500/mt ($6/mt) and more increases are expected over the next few weeks, the increase in trade prices was less, indicating a bearish outlook and expected low levels of restocking by key user industries like automotive.
“End-use industries are expected to be extremely cautious in committing fresh bookings amid fiscal year-end considerations and need to conserve liquidity and cash,” a steel sector analyst with a Mumbai-based financial advisory firm said.
“The aggregate demand outlook for these industries is also under pressure from persistent inflation and the rising cost of bank funds. Trade channels are expecting a further slowdown in stock movement and hence have little leeway in increasing prices at the same pace as producers,” he said.
At least two market intermediaries said that the landed price of ex-Japan CRC is now almost on a par with local trade prices and import volumes are still on the lower side, and this has reduced the window for trade and standalone re-rolling mills’ ability to hike local merchant prices.
