Local Indian cold rolled coil (CRC) prices have remained largely stable over the past week amid low trade activity reflecting the overall slowdown in demand as industrial users prepare for lean months during the current monsoon season and amid cautious restocking, SteelOrbis learned from trade and industry circles on Monday, June 22.
Sources said that benchmark 0.9 mm CRC prices are stable at INR 64.500/mt ($681/mt) ex-Mumbai and are also unchanged at INR 65,400/mt ($691/mt) ex-Chennai in the south.
Citing an example, the sources said that automobile manufacturers are faced with a steady slowdown in sales growth on month-on-month basis and this is expected to be aggravated as the monsoon season is extended over the next two months and is being reflected in lower booking volumes seen at both distributors and mills.
Meanwhile, distributors are not yet pushing discounted sales but instead are offering extended credit terms for confirmed bookings in order to liquidate stocks.
The market is also awaiting base pricing signals from large mills for July after mills decided to maintain base prices in June. It will be a challenge for producers to balance conflicting pulls of rising costs of production and limited flexibility in passing on higher costs to consumers at a time when demand is weakening and the market is already in an oversupply situation, the sources said.
“We expect CRC prices to remain range-bound in the absence of any significant positive drivers. There are sufficient stocks to meet the current low demand. Mills’ pricing for July will be key in determining the short-term trend,” a Mumbai-based distributor said.
“A few South Korean automobile passenger car makers in India are already preferring imports to meet their limited demand because of the price advantage. This is also affecting market sentiments,” he added.
$1 = INR 94.30
