Local Indian cold rolled coil (CRC) prices remained stable with market participants anticipating next round of losses soon amid reports of major consumers like automobile manufacturers starting to plan and implement output cuts in view of unprecedented rise in inventories of passenger cars leading to negligible trading volumes.
Sources said that benchmark 0.9 mm CRC price was stable at INR 57,400/mt ($684/mt) ex-Mumbai and unchanged at INR 57,750/mt ($688/mt) ex-Chennai in the south, but stability was attributed to very sharp declines seen earlier in the week and market seen to be taking a pause.
The sources said that with passenger car inventories surging to 700,000 at dealer end this month, and large car maker Maruti Suzuki India Limited (MSIL) announcing ‘adjustments to production’ and others expected to follow suit, outlook turned even more gloomy.
“Though the production cuts by car makers have not been specified, the fact that such cuts are coming just ahead of festival season indicates that from October onwards there will be high inventory and sluggish demand that is unlikely to even out in the short term. This will continue to lead to very small bookings and trading volumes of CRC in the coming months,” a Mumbai based distributor told SteelOrbis.
“Rerollers having long term supply contracts with auto makers are pushing higher volumes at discount in merchant sales after buyers are refusing to lift material as per agreement. This will remain an additional pressure on the price line,” he added.
$1= INR 83.90