Local Indian cold rolled coil (CRC) trade prices have lost ground over the past week despite mills increasing base prices for April, thereby indicating a bearish outlook and the inability of trade channels to pass on higher prices to end-users, SteelOrbis learned from trade and industry circles on Monday, April 3.
Indian benchmark 0.9 mm CRC prices have lost INR 400/mt ($5/mt) to INR 64,400/mt ($783/mt) ex-Mumbai and are down INR 500/mt ($6/mt) to INR 62,550/mt ($761/mt) ex-Chennai in the south.
“Clearly, the trade channels are in no position to absorb higher base prices. This is reflected in the fact that, despite the start of the first quarter of a new fiscal year, no re-rolling mills have been able to conclude long-term supply contracts as large buyers are unwilling to accept any price escalation clause in new supply agreements,” a Mumbai-based distributor said.
“The market is also awaiting demand signals from key auto manufacturers who will announce March sales growth data over the next few days. Indications are that sales growth will slow down and hence raw material restocking too will become more cautious,” he said.
However, producers have maintained a more optimistic outlook claiming that prices cannot move down below current levels when the market is cost-driven. “There will be some short-term volatility as the market adjusts to a high-price regime. But it will find a balance at a higher level in the medium term,” an official at a private mill said.
$1 = INR 82.20