Local Indian cold rolled coil (CRC) prices have indicated a mixed trend over the past week amid a bearish mood against the backdrop of declining trade volumes and the expected softening of demand as inflationary pressures mount on industrial users, SteelOrbis learned from trade and industry circles on Monday, April 20.
Sources said that benchmark 0.9 mm CRC prices have remained stable at INR 64,000/mt ($691/mt) ex-Mumbai but have lost INR 200/mt ($2/mt) to INR 66,600/mt ($719/mt) ex-Chennai in the south.
According to sources, trade volumes were seen to be steadily declining as key industrial users - under inflationary pressures and a softer demand outlook - were resorting to only need-based bookings and keeping minimal raw material inventories.
The automobile industry has been reporting robust sales growth over the past few months but, with several passenger car makers announcing hikes in prices forced by rising costs of production, this is expected to temper sales growth rates and have a matching impact on raw material purchases going forward, the sources said.
“Rapid consecutive base price hikes by producers are seeing the emergence of buyers’ resistance. Every user is extremely cautious in committing to bookings at a time when the demand profile is not changing,” a Mumbai-based distributor told SteelOrbis.
“We do not see prices going down very much because the cost pressures that we are seeing will be sustained. What we can safely assume is demand weakening and trade volumes softening,” he added.
$1 = INR 92.58
