While local cold rolled coil (CRC) base prices have officially been kept unchanged during the past week, premiums on sales from integrated steel mills and tradable price levels have edged up, riding on the back of a steady increase in bookings by key user segments like automobiles and consumer durables. Moreover, the shortage of hot rolled coil (HRC) for conversion to CRC has kept the CRC volumes available in the market very tight, traders and officials at steel mills told SteelOrbis on Monday, January 18.
Market sources said that several integrated steel mills have reported premiums of around INR 1,500/mt ($21/mt) on the base prices of INR 60,000-60,500/mt ($821-829/mt) ex-works for all higher-volume bookings.
In addition, tight availability of CRC for merchant sale has pushed the tradable price in western and southern regional markets to levels of INR 63,500-64,000/mt ($870-876/mt) ex-works, with reports suggesting that standalone re-rolling mills are only committing supplies under medium and long-term supply contracts and are curtailing spot sales in the face of the challenging sourcing of HRC from integrated steel mills, market sources said.
“Most user industries are showing robust growth. The automobile industry’s month-on-month growth in sales is expected to be carried forward into at least the next two quarters and even the planned price increase in January will enable auto manufacturers to sustain sales and hence CRC restocking is very strong,” an official at ArcelorMittal Nippon Steel said.
At least two large Mumbai-based traders said that local CRC prices can see a further increase of at least INR 2,000/mt ($27/mt) in reaction to the planned base price increases of integrated steel mills for HRC in January.
$1 = INR 73.00
