Local Indian cold rolled coil (CRC) prices have remained stable during the past week, halting a prolonged downtrend amid the improvement in bookings, although in low volumes, and optimism of consuming industries regarding maintaining sales growth in the coming post-monsoon months, SteelOrbis has learned from trade and industry circles.
Indian benchmark 0.9mm CRC trade prices have remained at INR 68,000/mt ($851/mt) ex-Mumbai and are stable at INR 68,500/mt ($857/mt) ex-Chennai in the south.
According to the sources in mill and trade circles, a key consuming industry like automobile companies is reporting improvements in the supply chain and the easing of shortages of imported components, which would enable them to sustain the sales growth seen in June and further ramp it up in the post-monsoon months starting from August, and this leads to optimism for a rise in bookings received by mills and re-rolling mills.
“The worst is nearing an end in terms of prices. But trade volumes will remain on the lower side. Producers will also see margin erosions from overall macro inflationary pressures and mills will continue to rein in output,” an official at a private mill said.
“Trade prices can be expected to remain range-bound in the medium term and mills will face a lot of challenges in attempting to push up base prices to compensate for rising input costs,” he said.
According to a Mumbai-based trader, while low volume bookings from trade and users have emerged as new support to prices, the negative is that end-use industries are still staying away from concluding long-term supply contracts, indicating that there is still a lack of confidence in the market.
$1 = INR 79.90