Large Indian steel mills have been successful in securing ad hoc increases in prices under October-December supply contracts for cold rolled coil (CRC) to automobile manufacturers, SteelOrbis learned from industry circles on Wednesday, November 29.
They said that the increase averaged at around INR 2,000/mt ($24/mt) for CRC supplies in November and December.
Details of the final higher price levels in supply contracts have not been disclosed by either the sellers or the buyers claiming “privileged information”.
According to these sources, though temporary increases are “unusual” in the course of existing supply contracts, large domestic mills have been able to make a strong case from the rise in input costs, particularly in the cost of imported coking coal.
They pointed out that, while earlier long-term supply contracts between steel mills and auto companies were generally for six months, the latest contracts are reduced to three months in order to offer a window for more frequent adjustments to prices in view of the higher volatility in the steel market.
