Local Indian cold rolled coil (CRC) prices have remained stable during the past week at INR 37,450/mt ($522/mt) ex-works amid mixed signals over possible base price revisions by domestic steel mills and uncertainties over the performance of the domestic auto industry, SteelOrbis has learned.
While overall domestic finished steel prices have bottomed out and are showing tentative signs of an upward trend, it is not clear whether such a trend will extend to CRC product categories.
The traders said that the auto sales increase over the past one month has been very marginal and at least some major domestic CRC producers such as POSCO India Limited are expected to conclude supply contracts at prices lower than current levels to support the auto industry.
“In any case, CRC is among the slowest moving among all flat steel products. So any revival in flat product prices like that seen in the case of hot rolled coil (HRC) would have a lag period in impacting the CRC market. Major consumers like auto manufacturers are still not out of the woods and not in a position to absorb higher prices, and hence producers are offering long-term supply contracts at lower levels. This will limit any upside potential for the CRC sub-category among flat products,” a Mumbai-based trader said.
Market sources said that at least some large CRC producers are seeking to conclude long-term contracts with auto manufacturers at prices at least 10 percent lower than current ones to be able to keep pushing volumes directly to end-users, to maintain the pace of stock movement, and at the same time support the auto industry.