Local India cold rolled coil (CRC) prices have remained stable during the past week, but market sentiments have become more bearish following reports that some large end-users have been deferring offtake against long-term supply agreements, with rerollers citing cutbacks in production levels, SteelOrbis learned from industry and trade circles on Monday, January 8.
Indian benchmark 0.9 mm CRC prices have remained unchanged at INR 62,200/mt ($748/mt) ex-Mumbai and stable at INR 63,550/mt ($764/mt) ex-Chennai in the south. At the same time, at least one supplier has been ready to provide INR 61,500/mt ($739/mt) ex-Mumbai.
According to the sources, large industrial users like automobile manufacturers are heard to be deferring lifting stocks from rerollers against January-March supply agreements as plant outputs are being reduced owing to the pile-up of inventories at automobile dealers, thereby lowering raw material demand.
“The demand slowdown will get deepen and extend right through the last quarter of the current fiscal year. Rerollers are already seeing a rise in inventory levels. Producers will attempt to increase prices, which will lead to even more cautious restocking by trade channels,” a Mumbai-based distributor said.
“We will see strong buyer resistance in the coming days to mills hiking base prices. Pressures will mount on traders and the revival of discounted sales looks imminent,” he said.
$1 = INR 83.20
