Local Indian cold rolled coil (CRC) prices have remained stable amid sluggish trade conditions and the negative outlook for the rest of the current fiscal year as major industrial consumers have cut back restocking amid falling sales growth for their products.
Sources said that the benchmark 0.9 mm CRC price is stable at INR 53,300/mt ($623/mt) ex-Mumbai and also unchanged at INR 54,600/mt ($639/mt) ex-Chennai in the south.
They said that major industrial consumers like consumer durables and automobile manufacturers have all announced price hikes for their goods effective from January and this, coupled with already slow sales growth, is expected to impact factory outputs and hence these companies have sharply reduced raw material off-take and inventory levels.
“There is a significant slowdown in off-take from both trade and mills. The latter have cut down conversion at rolling mills as there are sufficient inventories to meet weak demand during the rest of the fiscal. Distributors are not restocking in the face of liquidity challenges and are unwilling to extend credit from banks at the fag end of the year,” a Mumbai-based distributor said.
“We see a further downside to prices in the last quarter. Trade and mills can be expected to liquidate stocks at discounts during the year-end to get cash on the books while finalizing accounts,” he added.
$1 = INR 85.50