Local Indian cold rolled coil (CRC) prices have inched lower amid negligible trading and reports of key consumers like automobile manufacturers cutting back output and lowering dispatches of passenger cars to dealers to balance unprecedented inventory levels.
Sources said that benchmark 0.9 mm CRC prices are down INR 100/mt ($1/mt) to INR 57,300/mt (683/mt) ex-Mumbai and down INR 200/mt ($2/mt) to INR 57,550/mt ($686/mt) ex-Chennai in the south.
According to sources, a greater number of passenger car makers followed the lead taken by market leader Maruti Suzuki India Limited (MSIL) in announcing production cutbacks and slowing down dispatches of cars to dealers to attempt to balance inventories. This, the sources said, was resulting in almost a halt in fresh bookings received by mills and re-rollers left with inventories which were not lifted by their consumers against long-term supply agreements.
“There is no sign from key users like automobile, consumer durables and specialized packaging makers in booking raw materials to gear up to meet the usual festival season demand spike from October onwards. It seems that the festival demand can well be met from existing inventories of industrials without incremental output. Hence, the disinterest in committing to new CRC bookings,” a Mumbai-based distributor told SteelOrbis.
“We expect mills to drop base prices for September by INR 1,000-1,500/mt ($12-18/mt), prompting some buyers to defer trades,” he added.
$1 = INR 83.90