Local Indian cold rolled coil (CRC) prices have remained under pressure over the past week, losing ground rapidly as no breakthrough has been heard in long-term supply agreements between re-rolling mills and buyers which have remained in a logjam, SteelOrbis learned from trade and industry circles on Monday, April 25.
Indian benchmark 0.9mm CRC trade prices have lost INR 2,000/mt ($26/mt) for the second consecutive week to INR 81,800/mt ($1071/mt) ex-Mumbai and are down INR 2,500/mt ($33/mt) to INR 82,200/mt ($1076/mt) ex-Chennai in the southern regional market.
“Despite slow or negative sales growth in key CRC consuming industries like the automotive sector, consumer durable manufacturers are increasing their retail prices amid cost inflation, risking even a further slowdown in sales. Under these circumstances, a raw material offtake rebound does not seem a possibility and CRC prices remain in the negative zone,” a steel sector analyst with a Mumbai-based financial advisory firm said.
“Not only are bookings with mills falling, we are also hearing a lot of reports of buyers deferring taking deliveries of previous bookings. This naturally will lead to inventory pressure on prices,” he said.
Trade sources said that long-term supply contract negotiations between buyers and re-rolling mills have still made no progress on reaching common ground, with sellers seeking a price escalation clause and penalties on buyers for deferring deliveries, and so negative sentiments continue to prevail in the market.
$1 = INR 76.36
