Local Indian cold rolled coil (CRC) traded prices have moved up sharply towards the close of the past week, reacting to base price hikes announced by producers for February bookings, but market participants remain concerned over a further possible slowdown in trading activity owing to uncertainties in key consuming industries like automobile and consumer durable manufacturing, SteelOrbis learned from trade and industry circles on Monday, January 31.
Sources said that CRC trade prices are up INR 1,900/mt ($25/mt) to INR 67,900/mt ($905/mt) ex-Mumbai, gaining INR 2,000/mt ($27/mt) to INR 67,500/mt ($900/mt) ex-Chennai in the south.
“Unlike in the hot rolled coil (HRC) market, the current and projected demand increase for CRC continues to have a bearish outlook. We fear a further slowdown in CRC stock movement following the price increases, as key sectors like automotive continue to face challenges of declining sales, shortages of components and a high tax regime, and will not be in a position to aggressively restock raw materials,” a Mumbai-based steel distributor said.
“Consumption-led growth in the auto sector can be triggered if the government cuts the Goods and Service Tax (GST) on passenger cars from 28 percent to 18 percent, which will enable the industry to reverse declining sales and improve derived demand for inputs like CRC,” he said.
However, two other traders discounted the possibility of fiscal incentives like tax cuts to improve stock movement of CRC across trade channels, citing multiple challenges faced by key consuming industries like consumer durables and automotive, like extended shortages of key electronic components, low disposable income across urban centres, the overall inflationary pressures building up in the economy, and high bank interest rates.
$1 = INR 75.00
