Local Indian cold rolled coil (CRC) prices have continued their downtrend, losing ground amid a combination of the near halting of fresh bookings by large industrial users, particularly passenger car makers, and excess inventories held by re-rollers.
Sources said that the benchmark 0.9 mm CRC price has lost INR 200/mt($2/mt) to INR 58,900/mt ($704/mt) ex-Mumbai and is down INR 300/mt ($4/mt) to INR 59,200/mt ($707/mt) ex-Chennai in the south.
According to the sources, re-rollers have been diverting a lot of volumes from long-term supply agreements but not lifted by customers to merchant trade, leading to aggravated supply-side pressures.
At the same time, the biggest negative on the demand outlook has been the decline in July sales growth reported by most of the larger passenger car makers, leading to a lot of speculation that some large automobile companies could be considering idling some assembly lines to check the piling up of inventories of cars at dealers.
“Large industrials are in no hurry to restock raw materials as most are carrying large inventories of finished products and hence there is very little booking reported at the mill end. We will continue to see further declines in prices, as there is too much material chasing very weak demand,” a Mumbai-based distributor said.
According to an official at Tata Steel Limited, rising imports from FTA countries like Japan and South Korea are distorting the domestic market and Indian mills are facing an uneven playing field and the local market is unlikely to improve without government intervention.
$1 = INR 83.70