Local Indian CRC prices have gained INR 1,000/mt ($14/mt) over the past week with integrated steel mills increasing base prices to around INR 47,000-47-500/mt ($643-649/mt) ex-works, but trading conditions have remained cautious and a mixed outlook has prevailed among key user industries, sources told SteelOrbis on Monday, October 5.
They said that a section of buyers among key industries like automotive were optimistic for the revival of sales during the August-September period and expected this to gain momentum over the next two festival months.
For its part, the Federation of Automobile Dealers’ Association (FADA) said the decline in sales has been reversed and most manufacturers and dealers have been reporting growth in sales over the past two months.
The trend is expected to continue and automobile producers will be looking to increase assembly line output, leading to an increase in raw material restocking, including CRC, by integrated steel mills, supporting current higher prices.
However, at least one automobile manufacturer like MG Motors said that the revival in sales during the past two months should not be mistaken as sustainable. It maintained that the outlook for the next year is still critical as the auto industry is largely dependent on the macro-economic performance of the country, which is still very precarious going by all macro indicators.
“The increase in local CRC base prices is a function of aligning them with higher HRC prices. Demand for various flat products is showing variations across regional markets. Producers will have to manage the conversion of finished products dynamically, increasing output and sales of HRC which is seeing rising demand, while conversion to CRC will have to be managed efficiently in view of the uncertain demand outlook,” an official at JSW Steel Limited said.
$1 = INR 73.14
