Local Indian cold rolled coil (CRC) prices have continued on an uptrend for the eight consecutive week, gaining INR 2,000/mt ($27/mt) week on week to INR 45,500/mt ($622/mt) ex-works on the back of an increase in base prices by integrated steel mills and the rebound in sentiments in anticipation of the government’s revival package for the automobile industry, SteelOrbis has learned on Monday, September 7.
Market sources said that integrated steel mills increased base prices in the range of INR 1,500-2,000/mt ($21-27/mt) and the higher prices have been absorbed by the market as indicated by steady bookings received from key end-user industries.
Both outlook and sentiments have improved with the government giving out strong signals that it is considering a reduction in the Goods and Service Tax (GST) on various categories of vehicles to 18 percent from levels of around 28 percent, along with implementing the much-delayed scrappage policy for old vehicles, sources said.
According to traders, the lowering of taxes and backed by the scrappage policy will trigger a sustainable demand revival, enabling automobile manufacturers to increase output of their assembly lines and hence improve the outlook for higher-volume bookings of raw materials including CRC.
The traders said that the government announcement on tax cuts and the scrappage policy is expected before the end of the current month and this will offer a major demand boost and the automobile industry will be well positioned to increase output just in time for the festival months of October-December and higher off-take from CRC sellers.
$1 = INR 73.14
