Local India cold rolled coil (CRC) prices have remained at the previous levels and some steel mills are ready for further increases even despite the worsening of market sentiments and the closure or reduction of capacities in key user industries, SteelOrbis learned from trade and industry circles on Monday, May 17.
Local base CRC prices have remained at INR 69,000-72,000/mt ($937-977/mt) ex-work, but the real tradable prices for low volumes are heard at not below INR 75,000/mt ($1,018/mt) ex-Mumbai, while most sellers insist on JPY 80,000/mt ($1,086/mt) ex-Mumbai. Indian producer JSW Steel has started to announce a further base price increase, of INR 2,000/mt ($27/mt).
The sources said that key consuming industries like automobile manufacturers have either closed down assembly lines or curtailed output and mostly stayed away from fresh bookings in the face of logistical challenges and disruptions of truck movement across state borders, with differing lockdown restrictions in place.
Most traders and officials at producing companies, however, have ruled out any immediate downside risks to prices, pointing to the global rally in commodity prices including finished steel and said that producers are willing to get through the current demand weakness but not to adjust prices to drive volumes in the market.
They also pointed out that the impact of the demand weakness is likely to be at least partially offset by the aggregate lower output of steel mills in the current quarter as more oxygen gets diverted for medical use and given lower volume availability and sustained exports of hot rolled coil (HRC) and thus lower captive conversion will offer support for local CRC prices.
Sources said that standalone re-rolling mills are facing challenges in sourcing HRC from integrated mills and so they are maintaining a higher price of around INR 80,000/mt ($1,086/mt) ex-work despite the slowdown in demand and off-take by both market intermediaries and end-users.
$1 = INR 73.65