The local Indian cold rolled coil (CRC) market has entered a downward trend with prices decreasing by INR 500/mt week on week to 45,000/mt ($649/mt) ex-works, amid a combination of slow stock movement, reports of an inventory build-up at steel mills, and pressures from imports, traders said on Tuesday, June 25.
“A slowdown in stock movement in the local market coupled with a near standstill of exports suggest that domestic steel mills are facing a higher-than-normal inventory situation. End-users are favouring imports even for relatively small volumes, putting local CRC prices under pressure,” a Mumbai-based trader said.
“ A large section of market intermediaries are unwilling to make fresh commitments and prefer to wait for signals on a growth stimulus from the government when it presents the national budget on July 5,” the trader added.
A steel sector analyst with a Mumbai-based financial services advisory firm said that prices are caught in a logjam of steadily falling end-use demand and local steel mills’ inability to make pricing adjustments due to rising input costs.
Most CRC end-users have been facing an unprecedented fall in sales over the past six months and hence are lowering their raw material bookings drastically. Under such market dynamics, local CRC prices will continue to move within a narrow range with a strong negative bias.
$1 = INR 69.37