The eight week long uptrend in local Indian CRC market took a pause during the past week with prices stable at around INR 45,500-46,000/mt ($611-615/mt) ex-works, sentiments and outlook were positive in key user industries like automobile and consumer durables, SteelOrbis was informed on Monday, September 14.
According to traders and two officials with private producers, the pace of downslide in August sales slowed down while consumer durable majors are gearing up for festival sales ahead during October-November.
They said that auto industry sales during August 2020 was down just seven percent over corresponding month of previous year. This compared to June 2020 sales which was down 42 percent, indicating that while industry still remained in critical zone, the worst might be over and manufacturers could be looking at progressively increase assembly line output and this is being reflected in improved volume bookings received by integrated steel mills.
Similarly, the consumer durable industry which is seeing sharp sales recoveries in rural and semi-urban markets are all planning to increase production by 7-10 percent over October-November to cater to festival sales and this is a positive outlook for raw material procurement and support to CRC prices even at current higher levels, they said adding that festival sales account for around 40 percent of annual sales of most consumer durable manufacturers.
Officials in private steel majors like JSW Steel and Jindal Steel and Power Limited (JSPL) said that in view of anticipated uptick in demand in these two key user industries, local CRC prices still have sufficient headroom for further increase but they refrained to comment if a second price increase is possible in the current month instead stating that “producers are looking into various options factoring in volume bookings and market capacity to absorb higher prices.”
But at least two other traders said that a base price hike toward end-September is a distinct possibility in tandem with increase in base price of hot rolled coils.
$1= INR 73.55
