Local Indian CRC prices slump as concerns over manufacturing growth mounts

Tuesday, 22 January 2019 12:22:35 (GMT+3)   |   Kolkata

Over the past week, prices in the local Indian cold rolled coil (CRC) market have decreased by INR 2,000/mt during the past week to INR 47,000/mt (658/mt) ex-works, amid an increasingly negative outlook on industrial growth, a slowdown in off-take by actual users, and market expectations that domestic steel mills will be compelled to adjust base prices next month, traders said on Tuesday, January 22.

“Sentiments continue to weaken in the market as most indicators are in a negative zone. The manufacturing sector is on a slowdown and, with national elections barely a few months ahead, the resulting political uncertainties rule out any immediate revival in the business environment as few are willing to invest in the short term,” a Mumbai-based trader said.

“Market intermediaries and end-users are focussing on conserving cash in view of the current fiscal year drawing to a close and the uncertain business environment, and they are unlikely to aggressively restock intermediate raw materials,” the trader added.

Market sources said that, with dealers sharply reducing fresh bookings and local steel mills facing a steady rise in inventories over the past several weeks, the mills will have little option but to adjust base prices. “Protecting margins per ton is no longer a viable option for local steel mills as inventory costs are going up rapidly,” they said.

The market expects the steel mills to lower base prices by a range of INR 500-1,000/mt early next month, and this has caused more dealers to retreat from the market, the sources added.

$1 = INR 71.44

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