Local Indian cold rolled coil (CRC) prices have continued to surge, gaining INR 1,000/mt ($13/mt) week on week to around INR 50,800-51,000/mt ($686-688/mt) ex-works, amid continued tight supplies of hot rolled coil (HRC) available for captive re-rolling by integrated steel mills, an increase in fresh bookings by key industries like automotive, and anticipations of a base price hike for the current month.
With most automobile majors reporting a sharp increase in October sales, they are bullish on festive sales gaining further momentum during November and hence have aggressively increased average booking volumes of inputs like CRC as they ramp up output from their assembly lines.
A number of market participants said that the increase in tradable prices was also triggered by expectations of producers increasing base prices by at least INR 2,000/mt ($26/mt) for current month deliveries, with the formal announcements expected to be made over the next two weeks.
It has been pointed out that, while domestic steel mills were operating close to maximum plant utilizations levels, heavy merchant sales of HRC had resulted in a sharp drawdown in stocks available to feed their captive re-rolling mills, resulting in low inventories of CRC available to meet rising bookings by automobile and consumer durable manufacturers, who were ramping up production to meet revived festival demand.
At least two leading Mumbai-based traders said that there have been reports of some automobile manufacturers concluding large-volume bookings at a premium of 2-3 percent for immediate deliveries for December in view of pressing input restocking requirements to increase output from their plants.
$1 = INR 74.10
