Local Indian cold rolled coil (CRC) prices have recorded gains over the past week amid expectations that mills will go in for aggressive base price hikes for May deliveries and supported by continued moderate restocking by large industrial users and with re-rollers reporting declines in inventories.
Sources said that benchmark CRC trade prices are up about INR 800/mt ($11/mt) on the lower end of the range week on week to INR 59,500-60,500/mt ($706-717/mt) with the price at the higher end of the range effective for ex-Chennai deliveries in the southern region.
According to the sources, mills are expected to announce significant base price increases of about INR 2,000/mt ($24/mt) for May deliveries, triggering a hardening of trade-level prices. They said that industrial users led by automobile manufacturers maintained fresh bookings of moderate volumes and, with re-rollers reporting declines in inventories, buyers were faced with extended delivery timelines, providing support for prices.
“The mood on the sellers’ side is optimistic in view of opportunities to hike prices. The mood among buyers is more cautious. Lower import competition offers a window for base price increases. But there is a risk of buyer resistance and a fall in trade volumes,” a Mumbai-based distributor told SteelOrbis.
“The concern is that the market currently is largely supported by bookings from select industrials like automobile. Bookings from other small and medium-scale consumers in specialised packaging products, consumer durables and structural products are still very low and hence the demand side still lacks depth and hence downside risks to prices remain,” he added.
$1 = INR 84.27