Local Indian cold rolled coil (CRC) prices have showed a mixed trend over the past week with integrated steel mills maintaining prices, but the tradable prices have been lower due to the fall in bookings received from key user sectors, SteelOrbis learned from trade and industry circles on Monday, August 16.
The Indian integrated mills have kept base prices stable at INR 87,000-88,000/mt ($1,173-1,186/mt) ex-works, while the traded price has lost at least INR 1,000/mt ($13/mt) over the past week.
The sources said that the softening of traded prices was largely owing to sentiments that the robust growth in auto sales of 34 percent in July would ease as passenger car manufacturers are facing supply-chain disruptions in imported components and could lower their raw material restocking, and a few distributors have already been reporting a marginal fall in bookings received over the past week.
“Trading and bookings in the secondary market may fall, but downside risks will be limited. Standalone re-rolling mills have mostly locked up their output in long-term supply agreement at higher prices and this will support the market,” a steel sector analyst from a Mumbai-based financial services firm said.
“Growth in key user industries like automobile will ease in the current quarter as the low base effect on a monthly sequential basis will ease. But our assessment is that, with festival sales around the corner in two months’ time, automobile companies will try to attempt to overcome supply-chain disruptions like microchips and increase output, and so bookings will revive,” he added.
According to a Mumbai-based steel distributor, surging freight costs will make imports unviable for consumers and domestic sourcing for CRC will remain imperative for buyers, providing support to prices and in fact enabling sellers to increase pricing going forward in the current quarter.
The distributor said that ex-China freight rates have surged 223 percent since the first quarter of the current fiscal year and practically rule out import options for local CRC user industries.
$1 = INR 74.20
