Local Indian cold rolled coil (CRC) trade prices have softened over the past week with standalone re-rolling mills lowering capacity utilization levels in the face of the rise in inventory and overall negative sentiments from the sustained demand depression in key user industries, SteelOrbis learned from trade and industry circles on Monday, May 16.
Indian benchmark 0.9 mm CRC prices are down INR 500/mt ($6/mt) to INR 79,500/mt ($1,027/mt) ex-Mumbai and down INR 500/mt ($6/mt) to INR 79,700/mt ($1,029/mt) ex-Chennai in the south.
“Low bookings and deferment of deliveries faced by standalone re-rolling mills have forced the latter to drastically drop plant outputs. A key consuming industry like automotive is seeing lower sales owing to price increases and the usual slow market conditions during the monsoon season ahead and are committing only need-based raw material purchases,” a Mumbai-based steel distributor said.
“Even after falling for six consecutive weeks, buyers are finding current CRC prices too high, indicating the demand depression is being aggravated. With banks increasing lending rates to check raging inflation, the high cost of consumer finance is expected to slow down sales in key CRC consuming industries like electronics, household products and passenger cars. This is resulting in re-rolling mills with limited product portfolios facing the brunt of a market slowdown,” he said.
At least two market participants said that expectations of a base price reduction of at least INR 2,000/mt ($26/m) for the second time in May is also prompting dealers to defer bookings.
$1 = INR 77.44