Local Indian cold rolled coil (CRC) traded prices have been stable during the past week with the potential to move in either direction based on divergent outlooks of producers and key consuming sectors, SteelOrbis has learned from trade and industry circles.
The benchmark 0.9 mm CRC traded price has remained unchanged at INR 66,000-66,500/mt ($887-894/mt) ex-Mumbai and INR 65,500/mt ($880/mt) ex-Chennai in the south.
“The CRC price is critically poised and can move in either direction based on how the conflicting outlooks of producers and end-use sectors are reconciled. Mills will be attempting to increase base prices citing rising input costs, particularly energy costs,” a steel sector analyst with a Mumbai-based financial services advisory firm said.
“On the buyers’ side, a key user industry like automobile is looking at the national budget expecting cuts in the Goods and Services Tax (GST) by the government to boost demand and sales. The sector’s raw material bookings remain extremely cautious as declining sales are expected to continue through the current quarter unless a demand booster comes from the government,” he said.
According to two Mumbai-based distributors, the government decision to rescind renewed antidumping duties on CRC imports will offer resistance to local mills’ plans to hike base prices. They said that the current low demand from domestic auto majors is keeping imports at very low volumes, but the situation could change very rapidly in the government fiscal booster to the auto industry spurs sales, in which case auto manufacturers could look at increasing import contracts from the new quarter starting in April.
“The spread between HRC and CRC realizations is not more than INR 2,500-3,000/mt ($33-40/mt), which is not too viable a margin for value addition. With the HRC market performing stronger, the spread with CRC can only get narrower. Options under assessment are to either hike CRC base prices aggressively or lower allocations for captive re-rolling,” a source at ArcelorMittal Nippon Steel Limited (AMNS) said.
$1 = INR 74.40