Indian integrated steel mills and independent re-rollers have maintained their local cold rolled coil (CRC) prices at INR 39,500/mt ($527/mt) ex-works during the past week against the backdrop of a slight improvement in bookings from automobile and consumer durable end-user segments and reports of at least two major passenger car makers concluding long-term supply agreements, SteelOrbis has learned on Monday, July 13.
Market sources said that at least two southern India-based passenger car manufacturers negotiated long-term supply agreements with independent re-rolling mills, triggering optimism in the market.
Though most auto majors reported a sharp decline in June sales on year-on-year basis, factory dispatches during June improved sharply month on month, leading to a drawdown in inventories and the market expects fresh CRC bookings to gain momentum as auto majors start increasing assembly line outputs over the next one month.
Citing an example, an auto sector analyst said that Hyundai Motors India Limited (HMIL), the second largest passenger car manufacturer in the country, reported sales of 21,320 units in June this year, 49 percent lower than June 2019 but up 6,883 units from May this year.
He also pointed out that on an average for most passenger car companies retail sales were almost double wholesale sales to dealers, indicating a faster drawdown on inventories, which is a positive sign that the sector will commence restocking of raw materials going forward, with plans of increasing factory outputs.
“On the supply side, domestic CRC prices have also been maintained because integrated steel mills have limited rolling mill outputs and are focusing on aggressive HRC sales. Pricing will once again enter uncertain territory if steel mills start increasing rolling mill outputs, which they will have to in the near term,” an official at Indian mill said.
$1 = INR 75.00
