Local Indian cold rolled coil (CRC) prices have been moving in different directions amid cautious need-based buying and re-rollers in some regions reporting excess inventories after a few buyers deferred lifting stocks under long-term supply agreements.
Sources said that benchmark 0.9 mm CRC prices have declined INR 500/mt ($6/mt) to INR 50,500/mt ($557/mt) ex-Mumbai but have remained stable at INR 55,300/mt ($611/mt) ex-Chennai in the south.
According to the sources, at least three western India-based standalone re-rollers reported that some buyers on long-term supply agreements had deferred lifting stocks, prompting re-rollers to divert volumes to spot sales, resulting in a bearish mood in the market.
It was pointed out that, while major consumers like automobile manufacturers reported robust sales growth in November on year-on-year basis, sale growth was showing signs of tapering off compared to sales in October. This is causing more caution on restocking and possible deferment in lifting stocks as committed.
“There is clearly oversupply pressure on prices. Demand growth is not matching supplies. At the same time, market intermediaries are also facing liquidity challenges as they are having to offer extended credit terms to conclude sales,” a Mumbai-based distributor told SteelOrbis.
$1 = INR 90.53