Indian local cold rolled coil (CRC) prices surged over the past week, reacting to third base price increase by mills and sharp rises in HRC, but concerns over demand and slow movement of stocks from re-rolling mills further aggravated due to fears of falling automobile sales and hence demand for raw materials, SteelOrbis learned from trade and industry circles on Monday.
Indian benchmark 0.9 mm CRC traded price gained INR 4,000/mt ($52/mt) to level of around INR 85,400/mt ($1118/mt) ex-Mumbai and around INR 86,300/mt ($1130/mt) ex-Chennai in the south.
However, most market intermediaries reported sharp fall in trading volumes in the market as end users bookings were down, following a 23 percent fall in passenger car wholesale (dispatch from manufacturers to dealers) and this feared to get sharper in March and in the new fiscal owing to compounded increase in petrol and diesel prices and shortage of components forcing car companies to plan production cut backs in the coming months.
“Unlike other flat products like hot rolled coil, CRC price is reacting entirely from cost push without commensurate demand support. There is a lot of material floating in the market with buyers on long term contracts with re-rolling mill deferring deliveries,” a Mumbai based distributor said.
“There will be some rebalancing on the supply side as some mills are maximising HRC production and adjusting output of cold rolled mills. But we see very limited impact of low demand on prices as overall commodities market is on fire,” he said.
Exchange rate: $1=INR 76.40