Local Indian cold rolled coil (CRC) prices have continued to consolidate at higher levels for the second consecutive week moving up by INR 500/mt week on week to INR 51,500/mt ($775/mt) ex-works, on the back of a combination of sustained tight supplies, higher export opportunities and expected base price revisions by domestic steel mills, traders said on Tuesday, April 24.
“It is a typical bullish CRC market now ever since prices breached the INR 50,000/mt mark earlier in the month. CRC prices have surged by INR 1,500/mt over the past fortnight,” a Mumbai-based trader said.
“The upsurge is expected to continue as local steel mills can be expected to seize the current market conditions to hike their base prices for May deliveries. There might be a minor downside correction as prices are moving up too fast too soon but the size of the short-term price correction will be very limited,” the trader added.
According to two other traders, a few large steel mills are pruning booking volumes against the backdrop of tight overall CRC supply in the market, providing support to prices.
The market expects the supply -side tightness to be sustained for a while considering that most large mills are aggressively planning to push export volumes to markets like Malaysia, Indonesia and Nepal, the traders said.
According to market reports, the steel mills have increased their CRC offers by $15-20/mt since early this month, the traders added.
Indian steel mills are aggressively pushing export volumes considering the fact that the hike in offers coupled with the sharp depreciation of the Indian rupee against the dollar, from levels of INR 65.20 to INR 66.48 against the dollar this week will sharply increase margins from export transactions, the traders said.
$1 = INR 66.37