Local Indian cold rolled coil (CRC) prices have gained ground for the second consecutive week as integrated steel mills have increased base prices by INR 500/mt ($7/mt) to INR 40,500/mt ($541/mt) ex-works, supported by sustained fresh booking from end-users and improved sentiments amid reports of possible incentives from the government, SteelOrbis was informed on Monday, July 27.
Integrated steel mills have increased CRC prices to keep them aligned with recent increases in local base prices of hot rolled coil (HRC).
Market sources said that sentiment in the CRC market as well as in the auto industry has improved as reports trickled in that the government is framing an incentive scheme linked to exports of automobiles by domestic manufacturers and the value of locally-sourced components used by manufacturers.
Preliminary reports indicate that auto companies would get incentives based on their sales realizations from exports to a minimum of 10 overseas markets and incentives for local sourcing would give impetus to component manufacturers and CRC supplies from domestic steel mills.
At least two intermediaries said that they have been aggressively restocking anticipating integrated steel mills will continue to push up CRC prices as the differential with local HRC prices is still very narrow since the prices of the latter have been revised a greater number of times during the current month and producers will seek a higher price differential with local HRC prices.