Local Indian cold rolled coil (CRC) prices have remained unchanged during the past week at INR 43,800/mt ($610/mt) ex-works, but reports in the market indicate stray discounting of around INR 500/mt ($7/mt) as large steel mills have been attempting to check inventory build-ups, SteelOrbis has been informed.
According to traders, the steady decline in auto sales worrying the industry over the past several months has been compounded by disruptions in supply of imported automobile components from China, which will put fresh pressure on automobile manufacturers’ lower production, and hence the negative outlook on fresh CRC bookings received by steel mills.
With almost 30 percent of imported auto components sourced from China and no supplies forthcoming, several auto manufacturers in India would be forced to further reduce capacities of their production lines and hence lead to lower CRC bookings, while the stray cases of discounting that emerged during the past week are expected to gain traction in the coming weeks.
“Generally domestic automobile manufacturers carry component inventories of 4-6 weeks and this has fallen to critical levels since the virus spread commenced in China and the situation will compel domestic auto manufacturers to either lower or close production lines,” a manager at a South Korean auto manufacturer in India said.
$1 = INR 71.80