Local Indian cold rolled coil (CRC) prices have remained stable, largely viewed as just being a temporary pause, while the negative outlook has persisted as large industrial users have remained out of the market owing to production reductions of some, while others have been cautious in committing to raw material restocking and prefer to maintain liquidity, SteelOrbis learned from trade and industry circles on Monday, September 16.
Sources said that benchmark 0.9 mm CRC prices are stable at INR 56,400/mt ($671/mt) ex-Mumbai and unchanged at INR 58,800/mt ($677/mt) ex-Chennai in the south. The stability in the market is only temporary in the midst of negligible trading activity as large industrial users remain out of the market which has yet to see a new bottom.
The biggest negative impact on sentiments and mood is the unprecedented level of inventories, with automobile dealers and vehicles being sold at deep discounts, forcing automobile companies to cut back production even ahead of the festival season in October and November.
According to market insiders, demand for CRC is at its lowest levels, while end-users prefer not to restock but to conserve cash and liquidity as their cash flows have been impacted by unsold inventories.
“We do not see a rebound in the short and medium terms. At best, we can expect prices to remain range-bound,” a source at Jindal Steel and Power Limited told SteelOrbis.
“The usual festival season spike in demand is also missing this year. The demand and price depression will extend at least till December,” he added.
$1= INR 84.00