Local Indian cold rolled coil (CRC) prices have entered a definitive downtrend over the past week amid muted trade activity and a slowdown in stock movement, prompting a section of distributors to offer discounts to prevent inventory build-ups.
Sources said that benchmark 0.9 mm CRC prices are down INR 200/mt ($2/mt) to INR 63,800/mt ($677/mt) ex-Mumbai and have lost INR 700/mt ($7/mt) to INR 65,900/mt ($699/mt) ex-Chennai in the south.
According to the sources, large industrial consumers led by automobile manufacturers have become very cautious and are resorting to only need-based bookings, anticipating a weakening of demand as inflationary pressures build up across the economy, driven by rising energy costs. Automobile manufacturers have started to raise prices and this entails the risk of moderating the robust sales growth rates seen over the past few months. With this negative sentiment mounting, companies have been reducing booking volumes, resulting in the muted trade activity currently afflicting the market.
“The slowdown in stock movement has prompted some re-rollers and large distributors to push discounted sales and check the rise in inventory levels. But when costs are increasing across the supply chain, discounting cannot be sustainable,” a market insider told SteelOrbis.
Furthermore, a section of the market said that mills are expected to implement another base price hike in early May, estimated at around INR 750–1,000/mt ($8–11/mt), citing higher production costs.
$1 = INR 93.91
