Indian integrated steel mills have increased cold rolled coil (CRC) base prices by INR 500/mt ($7/mt) week on week to INR 39,500/mt ($530/mt) ex-works despite the below-expectation recoveries in key user industries like consumer durables and automobiles, and also low bookings, SteelOrbis was informed on Monday, July 6.
According to sources, producers have been pushed to adopt a risky pricing strategy to maintain profitability of operations even as most end-users in the automobile and consumer durable manufacturing industries are making minimal bookings as most of their sales are from existing inventories and factory outputs are still at reduced levels.
The uncertainty over whether higher prices will be sustained was reflected in at least one booking made by a western India-based re-rolling mill with a southern India-based auto manufacturer, which was at a discount of 2-3 percent on the increased base price, market sources said.
It was pointed out that most large passenger car manufacturers had increased production during June but their outputs are still far below the levels of the corresponding month of the previous year and most are still operating through two shifts at their assembly lines compared to three shifts normally, and this naturally also limited raw material stocking volumes.
$1 = INR 74.50