Local Indian cold rolled coil (CRC) prices have continued to soften although the pace of the decline has eased slightly on reports of modest fresh bookings from trade channels, SteelOrbis learned from trade and industry circles on Monday, May 8.
Indian benchmark 0.9 mm CRC trade prices are down INR 100/mt ($1.20/mt) to INR 63,000/mt ($769/mt) ex-Mumbai and are down INR 200/mt ($2/mt) to INR 61,050/mt ($745/mt) ex-Chennai in the south.
Sources said that the slight uptick in restocking by trade channels after mills dropped base prices possibly restricted the prolonged downtrend, even though the mood and demand have continued to remain weak.
According to a steel sector analyst with a Mumbai-based financial advisory firm, import competition has continued to rise, particularly with South Korean automobile companies in India shifting out of long-term supply agreements with local re-rolling mills. Since these companies were strategizing low raw material inventory management in the face of the sales slowdown, imports from South Korean mills based on spot bookings were being preferred, leading to increased pressures on local prices.
The landed price of ex-South Korea CRC currently enjoys a discount ranging at 12-15 percent over local prices and is an indicator of further downside risks in the local market.
However, domestic mills have maintained a more positive outlook. “Of course, some volatility is expected to persist in the medium term. But key user industries like specialized packaging, consumer durables and automotive will see buoyant months ahead, although the pace of sales growth may moderate amid inflationary pressures. Overall, we seek support in the market and, as producers with customers’ interest dominating, we will use prices to bolster market conditions,” he said.
$1 = INR 81.90