Local Indian cold rolled coil (CRC) prices have showed marginal gains over the past week, reversing the recent downtrend, as re-rollers were heard to be pulling back discounts to improve margins but lower-than-expected growth in passenger car sales in July was expected to keep demand muted, SteelOrbis learned from trade and industry circles on Monday, July 4.
Sources said that the benchmark 0.9 mm CRC price is up INR 500/mt ($6/mt) to INR 55,000/mt ($630/mt) ex-Mumbai and has also gained INR 500/mt ($6/mt) to INR 59,000/mt ($676/mt) ex-Chennai in the south.
According to the sources, most re-rollers were heard to be taking a pause from pushing sales at discounts in an attempt to improve margins, leading to the gains seen at the trade level.
However, with most passenger car makers reporting low single-digit sales growth in July, this is expected to keep demand under pressure and is reflected in ongoing low trade volumes despite slight improvements in price.
“Discounted sales by re-rollers have been going on for the past several weeks and are not sustainable anymore as the steady fall in prices has ensured almost negligible margin for the sellers. Protecting further erosion of margins by stopping discounts has become inevitable to maintain economic viability of operations,” a Mumbai-based distributor told SteelOrbis.
“But attempts to increase prices in the absence of any commensurate demand improvement will have a limited impact. Trade prices still have risks of fresh setbacks as industrials are still largely absent from the market,” he added.
$1 = INR 87.37