Local Indian cold rolled coil (CRC) have continued to record gains for the fourth consecutive week, with integrated steel mills increasing base prices to align them with higher hot rolled coil (HRC) prices, supported by fresh bookings by automobile manufacturers and indications of the revival deepening in the industry, SteelOrbis learned on Monday, August 10.
Market sources said that Indian integrated steel mills have increased base prices for current month deliveries by INR 1,000/mt ($13/mt) to INR 42,000/mt ($559/mt) ex-works to match the spate of hikes effected in base prices for HRC over the past six weeks.
The sources said that several passenger car manufacturers led by market leader Maruti Suzuki India Limited, Kia Motors, Audi, Renault, Tata Motors and Hyundai have lined up new product launches or upgrades of existing models in August, indicating a revival in the passenger car market and expectations among integrated steel mills that fresh bookings will gain momentum.
The sources said that, apart from new production launches, automobile companies are bringing back more assembly lines into production, which would trigger higher restocking of raw materials, thereby supporting higher CRC prices in the local market.
Furthermore, consumer durable manufacturers recorded sales growth in the range of 25-45 percent in July this year, compared to the peak lockdown period of April-June, which was also a positive for raw material bookings from this industry, the sources said.
An official at a standalone re-rolling mill said that inventories of HRC at integrated steel mills are on the lower side compared to two months ago and that re-rolling mills are facing supply issues which had prompted them to increase CRC prices in their negotiated supply contracts with automobile manufacturers over the past two to three weeks.
$1 = INR 75.10
