Local Indian cold rolled coil (CRC) prices have remained stable over the past week amid low trading volumes, with large industrial users slowing down restocking in response to rapidly moderating sales growth and a negative demand outlook, SteelOrbis learned from trade and industry circles on Monday, June 15.
Sources said that 0.9 mm CRC prices are stable at INR 64,500/mt ($677/mt) ex-Mumbai and unchanged at INR 65,400/mt ($686/mt) ex-Chennai in the south.
According to the sources, the slowdown in stock movement can be attributed to caution as regards booking raw materials, as industrial users have been faced with moderating sales growth on month-on-month basis.
For example, automobile sales have showed robust sales growth year on year, but, when seen on month-on-month basis, which determines production levels going forward, they showed very low single-digit growth, indicating an overall demand weakness driven by inflationary pressures.
“Part of the market slowdown is because the usual monsoon rains weaken demand. But there is also structural weakness across industrial users facing pressures from costs driven by rising energy prices. Therefore, an immediate rebound in sentiments and market conditions does not look imminent,” a Mumbai-based distributor said.
“The stability seen over the past two weeks is misleading, as there is too much volume chasing low demand. Even producers have held back base price revisions in the face of rising costs of production. At the trade level, a lot of inventory is idling, resulting in liquidity challenges for distributors,” he added.
$1 = INR 94.92
