Local Indian cold rolled coil (CRC) prices have remained stable amid the negative outlook with some mills offering discounts on base prices and with lower end-user procurement.
Sources said that official benchmark 0.9 mm benchmark CRC prices are unchanged at INR 62,500/mt ($750/mt) ex-Mumbai and are stable at INR 63,750/mt ($765/mt) ex-Chennai in the south.
However, contrary to market expectations of a base price increase in December, mills are offering discounts in the range of INR 1,500-2,000/mt ($18-24/mt) in view of the rise in mill-end inventories and the slowdown in bookings by industrials.
Both producers and end-users have been caught on the wrong foot by the sudden negative pressures emerging in the market. Only recently large mills had successfully negotiated a price increase for their long-term supply contracts (October-December), but now, since the same mills are resorting to offering discounts on spot sales, strong resistance from buyers is expected to emerge.
“Companies that have just concluded renegotiated long-term supply contracts at higher prices will surely resist mills. Why would anyone pay higher prices under long-term contracts when mills are doing spot sales at discounts to base prices,” a Mumbai-based distributor said.
“It will be interesting to watch the pricing strategy of producers now that the market is definitively entering a bear phase at a time when input costs are rising,” he added.
$1 = INR 83.30
