Indian local cold rolled coil (CRC) prices started to gain ground again during the last week, moving up by INR 500/mt ($7/mt) to INR 42,000/mt ($627/mt), ex-works, as local steel mills were seen to be commencing the second price hike of the month and tightening of supplies, traders said on Tuesday.
“After a brief pause the momentum is back in CRC market. At least two big steel mills on Monday announced hike in CRC base price of about INR 500/mt ($7/mt). Others are expected to follow over the course of this week,” a Mumbai based trader said.
“Even though stocks at dealers’ end is comfortable, the market expects tightening of supplies with large mills having booked significant CRC export orders in Southeast Asian markets,” he added.
Market sources said that local steel mills are citing rise in input costs of coking coal and power to revise base prices but the fact remained that the 41 percent drop in flat imports during April-August 2016 provided sufficient window to hike price and improve margins from local CRC.
Meanwhile at least two traders said that even after two price revisions this month, a section of the market is not ruling out another price hike next month, as current supply side dynamics ruled out any possibility of a downward correction or resistance to upside movement.
$1 = INR 67