Indian local cold rolled coil (CRC) traded prices gained ground over the past week on post-festival holiday restocking and improved production outlook in key end user industries like automobile, SteelOrbis learned from trade and industry circles.
Benchmark 0.9 mm CRC traded price moved up INR 1,500/mt ($20/mt) to the range of INR 77,100-78,100/mt ($1,036-1,049/mt) ex-Mumbai.
“The faster rate of increase in price of CRC compared to HRC is a strong positive for standalone rerolling mills, which have faced viability issues over narrowing spreads between the two. The rapid gain in CRC prices will now offer higher conversion margins and incentive to increase rolling mill output,” a steel sector analyst with a Mumbai financial advisory firm said.
“Auto companies like Maruti Suzuki India Limited (MSIL), the market leader and Hyundai Motors India Limited (HMIL) have indicated ramped up production in the coming quarter on slight easing of micro-chip tight supplies. Raw material stock drawdown before festival holidays triggered fresh bookings from end users, pushing up prices,” he said.
According to guidance issued by Tata Steel, prices will be INR 2,500/mt ($34/mt) higher in current quarter compared to last year and prevailing higher prices in Europe.
However, at least two traders said that such guidance were preparing ‘sentiments’ to accept higher base price increases by producers citing rising energy costs. But at the same time, falling iron ore prices could induce a price correction in the market, the traders said.
$1= INR 74.40