Indian integrated steel mills have maintained local cold rolled coil (CRC) prices unchanged, pushing volumes into the market through select volume discounts. But end-users have largely been pushing back fresh bookings, anticipating pressures will emerge shortly from re-rolling mills offering more competitive offers, based on more cost-effective imported hot rolled coil (HRC) as their input, SteelOrbis has learned from trade and industry circles on Monday, February 15.
The sources said that there have been reports that several large end-use customers of local integrated steel mills have been deferring either concluding or re-negotiating supply contracts and prefer to wait for new price offers from standalone re-rolling mills.
It is being anticipated that, with several re-rolling mills increasing ex-China HRC import bookings and expecting deliveries over the next one to three months, they would be able to pass on benefits of the lower import duty in their CRC price offers.
Sources said that domestic integrated steel mills have maintained base CRC prices at INR 60,000-60,500/mt ($821-826/mt) ex-works, with reports of volume discounts in the range of INR 1,000-2,000/mt ($14-28/mt).
According to assessment done by a Mumbai-based steel sector analyst, at the current ex-China HRC landed price at the lower import rate of 7.5 percent, local standalone re-rolling mills could secure cost advantage of around 5-12 percent compared to using local HRC as rolling mill feedstock, and it is to be seen how much of this benefit is passed on to local CRC end-users.
It was also pointed out that, after a short-lived growth in automobile sales in December 2020, declines in January 2021 and the traditional year-end trend of falling sales during the January-March period could rein in the automobile industry from aggressive restocking, putting pressures on prices and hence the low trading activity being seen currently.
$1= INR 73.00