Local Indian cold rolled coil (CRC) prices have strengthened but stock movements are still reported as having remained slow amid the cautious mood among end use industries particularly automobile manufacturing, SteelOrbis learned from trade and industry circles on Monday, January 16.
Sources have said that benchmark 0.9 mm CRC trade prices have gained INR 1,300/mt ($16/mt) to INR 62,000/mt ($760/mt) ex-Mumbai and are up INR 800/mt ($10/mt) to INR 59,550/mt ($730/mt) ex-Chennai in the south.
According to trade sources, re-rolling mills have completed drawing down inventories through discounted sales and CRC prices have been gaining traction from supply-side tightening rather than from any significant change in demand dynamics largely because the automobile industry mood is cautious as regards being able to maintain the sales growth achieved in the last calendar year.
They said that, while CRC user sectors like specialized metal packaging, high grade seamless pipes and consumer durables have been active in restocking, one of the largest consumers, the automobile industry, has been continuing a strategy of holding minimal raw material inventories.
“CRC is still the laggard among flat products both in terms of trade volumes and price movement. But producers are unlikely to make price adjustments to push volumes in the market considering the overall buoyant market conditions,” a Mumbai-based distributor said.
“On the contrary, mills are most likely to increase base prices and possibly refocus on the product mix to maximize returns from other product categories which are showing a strong performance,” he said.
$1 = INR 81.60