Local Indian cold rolled coil (CRC) prices have showed marginal changes amid reduced demand from end-user sectors and trade channels almost halting fresh bookings in the face of the continuously falling pace of stock movements, SteelOrbis learned from trade and industry circles on Monday, April 10.
The Indian benchmark 0.9 mm CRC price is up a marginal INR 100/mt ($1.20/mt) to INR 64,500/mt ($785/mt) ex-Mumbai and also up INR 100/mt ($1.20/mt ) to INR 62,650/mt ($762/mt) ex-Chennai in the south, and prices have remained at a discount to mills’ base prices which were increased last week.
Sources said that the mood in the market was impacted by the automobile industry’s bearish forecast of sales growth falling to low single digits in the current year and this was reflected by companies reducing fresh bookings from mills so as to maintain low raw material inventories.
Trade circles were heard talking of one long-term supply contract for the current quarter being concluded between a southern India-based re-rolling mill and a South Korean passenger car manufacturer, but this was not confirmed either by the seller or buyer. However, trade circles have speculated that the new supply contract was signed only after the supplier agreed to a lower price and to withdraw demands for a higher price, and this was interpreted by the market as a deepening of the bearish conditions.
“Most major companies in the automotive sector and consumer durable and industrial packaging material producers are decently stocked up with CRC requirements. With the falling sales outlook, they are in no rush to restock unless mills offer a discount,” a steel sector analyst with a Mumbai-based financial advisory firm said.
“But so far integrated mills are unwilling to confirm any bookings at a discount. Most of the burden of discounting to push sales is seen at the trade level. The situation is unsustainable in the medium and longer term. Something has to give in for the market to find a balance,” he said.
$1 = INR 82.20