Local Indian cold rolled coil (CRC) prices have recorded marginal gains amid cautious trade activity and a slowdown in restocking by end-use industrials.
Sources said that benchmark CRC prices have inched up by INR 100/mt ($1.20/mt) to INR 62,500/mt ($750/mt) ex-Mumbai and are also up INR 100/mt ($1.20/mt) to INR 63,950/mt ($768/mt) ex-Chennai in the south. Trade channels have not been willing to commit fresh bookings until there is clarity from mills on base prices for current month deliveries.
The market is also seeing a slowdown in restocking by industries particularly automobile manufacturing. After robust sales growth during the recent festival months, movement of stocks is expected to be slow in the coming months. Also, several large automobile companies have announced increases in passenger car prices effective from January, which could also lead to a fall in the number of customers and hence plants have been easing raw material inventory build-ups.
“We expect the market to remain range-bound in the absence of any significant driver on the demand side. Mills can be expected to hike base prices in the coming week to offset the rise in input costs. This will risk a further slowdown in trade activity,” a Mumbai-based distributor told SteelOrbis.
“Trade firms are facing a liquidity crunch as banks are becoming cautious about extending additional working capitals as the close of the current fiscal year comes near. This will continue to limit stock maintenance by trade in the coming months,” he added.
$1 = INR 83.30
