Local Indian cold rolled coil (CRC) trade prices have suffered major setbacks over the past week as optimism from robust sales growth reported by the automobile industry has been overtaken by concerns over the latter’s ability to sustain such growth in the face of worsening macroeconomic conditions and rising imports, SteelOrbis learned from trade and industry circles on Monday, November 7.
Indian benchmark 0.9 mm CRC trade prices have slumped INR 1,700/mt ($21/mt) to INR 63,600/mt ($770/mt) ex-Mumbai and are down INR 1,000/mt ($12/mt) to INR 63,500/mt ($768/mt) ex-Chennai in the south.
“The bullish sentiment from the sharp October sales growth reported by key user industries like automobile, consumer durables and industrial packaging is dissipating. High inflation figures, the central bank increasing interest rates, rising fuel prices and passenger car markers announcing higher prices from January are strong headwinds for the raw material market,” a Mumbai-based distributor said.
“It is getting clear that the Indian steel market is not as decoupled from global trends as claimed until now. The negative of overall depressed manufacturing sector growth will cast a bearish trend on the CRC market too. The plunge in CRC prices seen last week has been sharp and points to the short-term emerging trend going forward,” he said.
According to a steel sector analyst with Mumbai-based financial services firm, trade CRC prices are already at a 1-2 percent discount to mills’ base prices and this is expected to widen further with the next trade target price expectation at INR 62,500/mt ($757/mt) in the current month.
$1 = INR 82.60
