Local Indian cold rolled coil (CRC) prices have remained stable in the past week and missed out on the overall improvement seen in other flat product segments, largely owing to difficulties faced by re-rollers in liquidating excess inventories.
Sources said that benchmark 0.9 mm CRC prices are stable at INR 53,300-56,000/mt ($618-649/mt) depending on the supplier. According to the sources, the overall improved trade and price conditions in flat products hve eluded CRC largely because re-rollers have been facing challenges in liquidating inventories, which have continued to show a rising trend because buyers on long-term contracts have been either deferring lifting stocks or have been cancelling bookings.
As per trade circles, re-rollers are saddled with unsold stocks estimated at around 35,000 mt, up from about 22,000 mt in earlier weeks, and such stocks have not been moving because the re-rollers have been unwilling to push discounted sales as this would impact their cash flows toward the end of the fiscal year.
“Most end-user industries, including automobiles, have announced price hikes for their products in January. This will trigger a slowdown in sales growth and hence these user industries are also very cautious in restocking raw materials,” a Mumbai-based distributor said.
“We expect CRC prices to remain range-bound and a laggard in the flat product segment as the drivers of the market will be neutral,” he said.
$1 = INR 86.46