Local Indian cold rolled coil (CRC) prices have sought lower levels after mills started to drop base prices for the current month and with large industrial users led by automobile manufacturers lowering or halting bookings as they have cut back outputs, facing an unprecedented rise in inventories.
Sources said that the benchmark 0.9 mm CRC price has lost INR 900/mt ($11/mt) to INR 56,400/mt ($672/mt) ex-Mumbai and is down INR 750/mt ($9/mt) to INR 56,800/mt ($677/mt) ex-Chennai in the south.
They said that key users across industries like consumer durables, automotive and industrial packaging are all looking at dismal sales growth and hence have either halted restocking of raw materials or are adopting only need-based purchases.
“The mood in the market has taken a big hit from passenger car sales recording two consecutive months of declines in July and August. The approaching festive season of October-November usually sees a demand uptick. But this is unlikely this year as the all-time high inventory of 7,800,000 passenger car units at dealers can meet incremental demand if any, and car makers are planning output cuts and are almost halting all raw material restocking,” a Mumbai-based distributor said.
“Heavily discounted sales of CRC will increase as there is too much volume chasing too little demand. The base price reduction by mills is insufficient to improve trade volumes either,” he added.
$1 = INR 83.90