Local Indian cold rolled coil (CRC) prices have lost ground over the past week, with large industry buyers from the automobile sector pausing restocking, while a big stand-alone re-roller facing production disruptions earlier has normalized output, easing the slight tightness of supplies, resulting in prices seeking lower levels.
Sources said that benchmark 0.9 mm CRC prices have edged down by INR 600/mt ($7/mt) to INR 56,100/mt ($636/mt) ex-Mumbai and have lost INR 300/mt ($4/mt) to INR 59,700/mt ($677/mt) ex-Chennai in the south.
It was pointed out that, with the automobile industry registering negative sales growth during the past two months, the festival season sales uptick is expected to be moderate compared to earlier years. Under these circumstances, any incremental demand would largely be met from existing inventories, with dealers and manufacturers being cautious in increasing assembly line production levels and having almost completed raw material restocking in earlier weeks, leading to sluggish bookings over the past few days.
Meanwhile, the resumption of normal production by a large re-roller has also increased supplies to the market and, without an increase in demand, prices have trended lower, the sources said.
“The main concern of the market is, unlike any recent years, the seasonal demand improvement is proving elusive now. Passenger car prices are being slashed for the festival season as manufacturers pass on the benefits of the cuts in the Goods and Service Tax (GST), announced recently by the government, to consumers. But its impact in boosting sales is still very conservative and may be insufficient to trickle down to positive demand for raw materials,” a Mumbai-based distributor told SteelOrbis.
“Prices are moving in a narrow range with a negative bias as large parts of the market close down for the festival holidays and buyers take a pause,” he added.
$1 = INR 88.19
