Local Indian cold rolled coil (CRC) prices have inched up marginally, with the increase viewed as a mild positive correction after prolonged declines, though the fundamental weakness in demand and low bookings by large industrial users have continued to keep the outlook negative for the short and medium terms.
Sources said that benchmark 0.9mm CRC prices have gained a marginal INR 200/mt ($2.4/mt) to INR 59,800/mt ($715/mt) ex-Mumbai and have also inched up INR 100/mt ($1.20/mt) to INR 60,100/mt ($718/mt) ex-Chennai in the south.
According to sources, re-rolling mills have been aggressively pushing higher volumes into merchant sales at discounts after buyers under long-term contracts were deferring lifting stocks, having become extremely cautious over raw material inventories following the slowdown in finished product sales growth.
“Industrials like automobile and specialized packaging and container manufacturers are facing a lot of headwinds in sustaining sales growth. Their margins are also under inflationary pressure. Hence, users are extremely conservative in raw material restocking to limit cash flows. All market participants, mills, re-rollers and traders, are carrying higher stocks and discounted sales are the only option,” a Mumbai-based distributor said.
“But pricing is also losing its effectiveness as the fundamentals of the market in terms of demand and industrial growth is very negative. We expect bearish conditions to be sustained for several months now,” he added.
$1 = INR 83.60