Local Indian cold rolled coil (CRC) prices sought higher levels on slight improvement in mood on reports that at least two large rerollers have been successful in concluding long term supply agreements of ‘favorable revised terms’ for the next quarter even though longer term outlook remained cloudy from uncertainty of demand in the automobile sector.
Sources said that benchmark 0.9 mm CRC price was up around INR 800/mt ($9/mt) in the range of INR 56,300-59,000/mt ($687/mt) with price at the highest end effective for regional markets around Chennai in the south.
The uptrend was also supported by market expectations of a base price hike by mills over the coming week, expected to be around INR 1,500/mt ($17/mt) and possibly timed with the implementation of the recommended 12 percent safeguard levy on import flat products.
According to the sources, information trickling in indicated that some of the long-term supply agreements that were successfully concluded over the past week have incorporated several clauses favorable to mills, taking into account the impact of safeguard levy on imports and the provision of a mid-quarter price increase subject to agreement between the buyer and the seller.
However, a cloudy outlook emerging from the automobile sector tempered the overall mood in the market. A section of market participants said that raw material demand from the automobile was expected to be tepid next quarter as most passenger car makers have announced price hikes effective April, and this would further aggravate depressed or even negative sales growth seen over the past months.
$1 = INR 85.60
