Local Indian cold rolled coil (CRC) prices have edged down in line with overall weak sentiments in the finished steel market due to fiscal year-end considerations and key sectors struggling to maintain sales growth in the face of inflationary pressures and the fall in the pace of raw material restocking, SteelOrbis learned from trade and industry circles on Monday, March 20.
Indian benchmark 0.9 mm CRC trade prices are down INR 300/mt ($4/mt) to INR 64,800/mt ($785/mt) ex-Mumbai and have lost INR 500/mt ($6/mt) to INR 63.050/mt ($764/mt) ex-Chennai in the south.
“Trade channels have almost pulled out from the market, busy with closing their books of accounts and not committing funds in fresh bookings. At the same time, key user sectors like consumer durables and automobile are facing strong headwinds in maintaining sales growth and hence are reducing raw material restocking,” a Mumbai-based distributor said.
“Rough estimates by trade circles indicate that aggregate demand is down 10-15 percent over the past one month, leading to high-priced inventory pile-ups at the distribution level. CRC prices still have a lot of downside risks. But the uncertainty is over the pricing strategy of mills. There are lot of indications that mills will continue their aggressive pricing, leading to further market resistance,” he said.
However, according to an official at a government mill, producers are most likely to take a “differential pricing strategy product to product” instead of across-the-board revisions in prices, indicating that slow moving product categories may be spared any further price increases.
