The local Indian cold rolled coil (CRC) market has continued to show vastly divergent trends across regions amid thin trading volumes and cautious bookings during the monsoon season and with leading consumers like the automobile industry looking at a lean few months of business ahead.
Sources said that benchmark 0.9 mm CRC prices have suffered major setbacks, declining by INR 1,000/mt ($12//mt) to INR 57,500/mt ($673/mt) ex-Mumbai following widespread rains and disruptions in transport and logistics from flooding in several parts of the western region. However, in contrast, CRC prices have gained around 500/mt ($6/mt) to INR 61,500/mt ($720/mt) ex-Chennai in the south.
According to sources, the price increase in the south - despite the overall negative trend and outlook - has been largely attributed to logistical issues causing delivery delays to key industrial users, as well as to some re-rollers taking advantage of the situation by quoting higher prices to fulfil urgent delivery commitments.
“Most industrial users will face a slowdown in sales during June-October and this is getting reflected in cautious and slow restocking of raw materials. Some large passenger car makers have unofficially reduced output of assembly lines. This is slowing down the mill-to-market movement of CRC,” a Mumbai-based distributor told SteelOrbis.
“Market intermediaries are also uncertain over the June base pricing strategy of mills. A section of the market expects producers to venture into another round of base price increases for June deliveries, even at the risk of a further slowdown in trade activity,” he said.
$1 = INR 85.44