Local Indian cold rolled coil (CRC) prices have continued on an uptrend for the sixth consecutive week, moving up by INR 500/mt ($7/mt) week on week to INR 43,000/mt ($575/mt) ex-works on the back of an anticipated base price increase in September, but trading activity has fallen sharply, traders said on Monday, August 24.
According to market sources, fresh bookings by key consumers like auto manufacturers have tapered off over the past week, either because most have completed their restocking or the July demand revival is not expected to be sustained during the current month and manufacturers are unlikely to increase capacity utilizations above the current level of 50-60 percent immediately, leading to a sharp fall in traded volumes.
The sources said that to align CRC prices with the sustained rise in base prices of hot rolled coil (HRC), producers are considering increasing base CRC prices for September deliveries by INR 500-1,000/mt ($7-14/mt) when new pricing are to be announced for the first time in a couple of weeks starting next week.
While producers will keep attempting to push up prices as the festival months of September and October approach, the key uncertainties are whether festival demand will reverse the demand depression, the sources said. As things stand now, the manufacturing index in July contracted for the fourth consecutive month and the trend is unlikely to be reversed in August, and this would continue to offer a strong headwind against a revival in bookings for CRC, the sources added.
$1 = INR 74.76
