The previous downtrend in the local Indian cold rolled coil (CRC) market has been reversed during the past week, with prices recording gains following hikes in base prices announced by a few large domestic mills, but a sharp fall in trading volumes has been reported, reflecting weakening demand, with only need-based purchases being confirmed by large industrial consumers.
Sources said that 0.9 mm benchmark CRC prices are up INR 1,000/mt ($11/mt) to INR 64,600/mt ($684/mt) ex-Mumbai and have gained INR 1,000/mt ($11/mt) to INR 66,500/mt ($704/mt) ex-Chennai in the south.
According to the sources, trade channels have mostly paused fresh bookings, facing inventory pile-ups. In addition, large industrial users are becoming extremely cautious in restocking raw materials, expecting a slowdown in sales in reaction to the overall energy cost-driven inflationary pressures mounting across industrial sectors.
Citing examples, the sources said that, while passenger car makers have started announcing higher prices, the government is expected to announce very stiff hikes in prices of fuels, in response to the prolonged war in the Middle East. These are expected to significantly depress demand from key user segments.
“With the outlook of macro-economic indicators turning very negative as the impact of the Middle East war deepens, the steel market overall is also entering very negative territory. The worry is that price gains seen now are on the back of declining demand,” a Mumbai-based distributor told SteelOrbis.
“With every industrial sector struggling from rising costs and demand depression, the market will remain volatile amid thin trading volumes,” he said.
$1 = INR 94.41
