Local Indian cold rolled coil (CRC) prices continued to seek lower levels on mounting pessimism over further growth of key consumer sectors like automobiles and surplus inventories of rerollers.
Sources said that 0.9mm benchmark CRC price lost INR 400/mt ($5/mt) at INR 59, 600/mt ($713/mt) ex-Mumbai and down INR 500/mt ($6/mt) at INR 60,000/mt ($718/mt) ex-Chennai in the south.
According to sources, going by trend in the first quarter of fiscal 2024-2025, it was evident that the automobile industry was unlikely to maintain the 12 percent growth in sales achieved in 2023-2024 and with large passenger car inventories both with dealers and manufacturers, automobile companies are slowing down raw material bookings.
And the impact of this is being felt largely by standalone rerollers having long-term supply contracts. With customers deferring lifting of committed stocks as per schedule, the rerollers are increasing merchant sales putting additional pressure in the trade price line, the sources said.
“Mills have cut base price in July and trade is offering aggressive discounts. But pricing is not a key issue in a bearish market where fundamental demand is seeing to weaken week on week. Lower price can only have a minimal impact on driving volumes when user industries do not need to increase raw material inventories,” a Mumbai based distributor said.
“No revival in demand can be expected in the current monsoon season, We expect losses to extend for at least another 1-2 months,” he said.
$1=INR 83.50