Local Indian cold-rolled coil (CRC) prices have remained stable or showed a slight downward bias in several offers amid muted trade activity, amid participants waiting signals on September base pricing from mills and sluggish sales growth in major consuming sectors.
Sources said that benchmark 0.9 mm CRC price has remained stable at INR 55,600/mt ($630/mt) ex-Mumbai but at INR 59,500/mt ($675/mt) ex-Chennai in the south, down by INR 500/mt ($5.6/mt) week on week.
According to the source, distributors were deferring fresh bookings awaiting September base price announcement by mill which a section of the market expected a hike of around INR 1,500/mt ($17/mt). At the same time, industrial buyers led by automobile manufacturers had slowed down raw material restocking after below expectation sales growth just ahead of the festival season with some companies even recording a negative sales growth in August. However, downside risk too has been minimal considering easing of import pressures with landed price of imported CRC staying well above current trade level local price.
“There are uncertainties on the demand side. The government has announced reforms of the indirect tax structure and reduction in the rates of tax across all products. This has led to consumers deferring purchases until the new tax regime comes into force leaving dealers of passenger cars and consumer durables with rising unsold inventories,” a Mumbai based distributor said.
“A lower tax rate will fuel demand but only after a lag and in the meantime, bookings across the supply chain will be slow. Also, a base price hike will improve margins of producers but at risk of further slowdown in movement of stocks from mill to end users,” he added.
$1= INR 88.26