Local Indian cold rolled coil (CRC) trade prices have continued to surge to record levels and much rapidly than a week before, reacting to mills’ hiking of their hot rolled coil (HRC) prices for the second time in March, but compounding fears of a further slowing down of stock movement emerging, as key consuming industries like automotive are not in a position to bear the brunt of such cost inflation, SteelOrbis has learned from trade and industry circles.
Local Indian benchmark 0.9 mm CRC trade reference prices have been reported at INR 81,400/mt ($1,063/mt) ex-Mumbai, up from INR 73,200/mt ($956/mt) a week ago and up to INR 82,300/mt ($1,074/mt) ex-Chennai in the south, compared to INR 72,300/mt ($944/mt) a week ago.
“A key consuming sector like automotive will be hit the worst by the increase in prices. It’s a triple whammy for auto manufacturers. Retail petrol and diesel prices need to go up by another 10 percent to bring parity with imported crude oil prices at current levels. This will trigger a demand recession in automobile sales. Manufacturers have been cutting back production in view of the shortage in components and micro-chips,” a steel sector analyst with a Mumbai-based financial services firm said.
“Raw material bookings including CRC from the auto industry will remain depressed, with low stock movements from intermediaries, rolling mills and end users. Low demand will not impact prices in view of the overall inflation in commodity markets, but dealers and rolling mills will reduce inventories, while mills will focus more on HRC and less on captive conversion,” he said.
$1 = INR 76.60