Local Indian cold rolled coil (CRC) prices have declined amid pressure from the slowdown of fresh bookings from key user industries like automobiles, with re-rolling mills lowering output for inventory management, and market expectations of producers adjusting base prices to drive stock movement, SteelOrbis learned from trade and industry circles on Monday, November 22.
The traded price of 0.9 mm benchmark CRC is down INR 1,700/mt ($23/mt) to INR 75,400-76,400/mt ($1,014-1,028/mt) ex-Mumbai.
According to traders, though automobile manufacturers are optimistic on increasing output during the coming quarter, the rebound in output is likely to be lower than expectations and hence the caution over increasing raw material bookings from rolling mills.
At least two western India-based re-rolling mills have reported that long-term contract buyers have deferred taking deliveries scheduled for December, prompting the mills to adjust output accordingly, impacting sentiments and leading to slight oversupply putting pressures on traded prices of distributors.
Unconfirmed reports in the market suggest that at least a few buyers with long-term contracts are seeking price negotiations to secure benefits of softer hot rolled coil (HRC) prices.
“In recent months, CRC has been an outlier in the flat product category with volumes and prices moving against the rising trend in the HRC market. The fall in price of CRC is easing, but a strong rebound is still elusive as there are too many variables impacting production in key user industries,” a steel sector analyst with a Mumbai-based financial advisory firm said.
“Barring a few South Korean auto companies, no local passenger car maker is importing. This will hence offer some market support,” he added.
$1 = INR 74.30