Local Indian CRC trade prices fall, fewer re-rolling mills report successful long-term deals

Monday, 30 May 2022 12:38:55 (GMT+3)   |   Kolkata
       

Local Indian cold rolled coil (CRC) trade prices have continued to lose ground as end-user industries led by automotive have stayed away from raw material restocking, faced with challenges of achieving sales growth, expected base price cuts by mills, and fewer long-term supply contracts concluded by re-rolling mills, SteelOrbis learned from trade and industry circles on Monday, May 30.

Indian 0.9 mm CRC trade prices have lost INR 1,700/mt ($ 22/mt) to INR 75,800/mt ($977/mt) ex-Mumbai and are down INR 2,000/mt ($26/mt) to INR 76,700/mt ($988/mt) ex-Chennai in the south.

According to a Mumbai-based distributor, there is hardly any trading activity in the market. For one, end-user industries like automotive are suffering from a negative outlook due to inflation, rising fuel costs and higher credit costs as headwinds to achieve sales growth. Secondly, few re-rolling mills have reportedly been able to successfully conclude long-term supply agreements with buyers, indicating that merchant sales volumes from these re-rolling mills will increase, putting incremental pressure on prices.

A steel sector analyst with a Mumbai-based financial advisory firm said that, apart from supply-side pressures, mills will be forced to cut base CRC prices as HRC trade prices have been falling faster, widening the spread with CRC trade prices.

He said that, while the market expected the HRC base price to be cut by around INR 2,000/mt($26/mt) for June deliveries, CRC base prices would need to be cut deeper by at least  INR 4,000/mt($52/mt) to maintain a reasonable spread between the prices of these two flat product categories.

 

$1 = INR77.60

 


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