Local Indian cold rolled coil (CRC) prices have continued on an uptrend for the seventh consecutive week, gaining INR 400/mt ($6/mt) week on week to INR 42,750/mt ($600/mt) ex-works, as large steel mills have completed base price hikes for current-month deliveries and as there are expectations of restocking by key consuming industries, SteelOrbis was informed on Monday, January 13.
Market sources said that, unlike the case of hot rolled coil (HRC), large steel mills have been more cautious in their expectations for further market development and the planned increase in CRC base prices for February delivery has thus been about INR 500/mt ($7/mt).
“Passenger car sales in 2019 declined 19 percent, the sharpest since 1997. It is a hope that the worst might be over and automobile manufacturers are gradually bringing idle production lines back into operation even though monthly sales are yet to get on a positive curve. The market is cautiously optimistic that higher production will prompt auto manufacturers to increase fresh CRC bookings,” a manager at JSW Limited said.
“We are also expecting some changes in the import duty regime with the government indicating that it would focus on reducing ‘non-essential imports’ in the forthcoming national budget. If such measures are taken, domestic prices will find support at higher levels and improve margin realizations for companies like us,” he added.
However, on a note of caution, a steel sector analyst at a Mumbai-based advisory firm said that, with oil prices rising in the wake of the US-Iran geo-political face off and Indian inflation nearing the six percent mark, this would limit any significant revival of demand for automobiles specifically and demand for steel will remain muted, putting caps on how high CRC prices can rise.
$1 = INR 71.20