Local Indian cold rolled coil (CRC) prices have lost ground over the past week ahead of the holidays next week and the fall in business activity, but the outlook remains positive with key industries expected to restock after a brief pause as they have been posting strong sales during the ongoing festival season, SteelOrbis learned from trade and industry circles on Monday, October 17.
Indian trade prices for benchmark 0.9 mm CRC have lost INR 700/mt ($9/mt) to INR 65,500/mt ($796/mt) ex-Mumbai and are down INR 800/mt ($10/mt) to INR 65,000/mt ($790/mt) ex-Chennai in the south.
“The slight downward movement of the price trend is not so much a matter of concern. Most user industries like consumer durables, packaging materials and automobile manufacturers are reporting strong sales growth and will get back to restocking after a short pause ahead of the holidays,” a Mumbai based distributor said.
“Standalone re-rolling mills are reporting a steady rise in volume off-take against their long-term supply contracts indicating a positive outlook,” he said.
However, a steel sector analyst with a Mumbai-based financial services advisory firm has maintained a more cautious stance. He said that the market has not yet factored in negative macro-economic indicators like inflation pressure reflected in the Consumer Price Index at 7.71% in August at a five-month high, and with the central bank expected to further tighten monetary policy, resulting in higher interest rates of lending by commercial banks.
He said that measures to control inflation by the government would impact key industries with a lag and the resultant demand compression will ultimately catch up in the steel sector too.
$1 = INR 82.30