Local Indian cold rolled coil (CRC) prices have rallied in reaction to the base price hikes announced by large mills last week and a few more re-rolling mills reporting new long-term supply agreements on “favourable terms”.
Sources said that benchmark 0.9 mm CRC prices are up by a range of INR 1,000-1,700/mt ($12-20/mt) to the range of INR 58,000-60,000/mt ($673-700/mt), with higher prices quoted for ex-Chennai deliveries.
According to the sources, a few larger stand-alone re-rollers have reported the successful conclusion of long-term supply contracts for April-June on favourable terms, referring to positive price escalation clauses in the agreements, while buyers are reconciling to domestic prices being likely to consolidate in the coming months.
“The rally in domestic prices is based on the sound fundamentals of medium-term supply tightness, better-than-expected demand for key user industries, and expected checks on imports,” a Mumbai-based distributor told SteelOrbis.
“Passenger car makers have hiked prices effective this month. But its impact on sales growth is expected to be limited and the demand forecast for raw materials is less bearish than before, hence the slightly better mood of market participants,” he added.
However, a steel sector analyst at a Mumbai-based financial advisory firm maintained a more cautious outlook for the medium term. He said that an estimated 13 million mt of new capacity is expected to come on stream in 2025, of which at least half would comprise flat products. This, coupled with risks of higher imports from FTA countries as new tariff skirmishes change global trade flows, promises clear risks to domestic prices, he noted.
“Fast growth in local capacity will lead to supply exceeding consumption and an oversupply situation and lower margins for producers, with additional complications arising from global trade policies,” he said.
$1 = INR 85.80