Local Indian cold rolled coil (CRC) prices have consolidated at higher levels for the third consecutive week, gaining INR 500/mt ($7/mt) week on week to INR 41,000/mt ($547/mt) ex-works in anticipation that domestic steel mills will revise base prices for August deliveries to align them with higher hot rolled coil (HRC) prices and expected higher-volume fresh bookings from the auto sector, traders said on Monday, August 3.
Integrated steel mills are expecting higher CRC prices to be sustained with the government planning fiscal incentives for incremental higher usage of domestic steel in key manufacturing sectors to act as a disincentive for imports.
The signs of recovery in auto sales has also prompted the market to expect automobile manufacturers to increase assembly line output and so they have increased bookings of CRC from integrated steel mills, the traders said.
According to an official at a western India-based integrated steel mill, CRC production is being managed dynamically supported by strong HRC export dispatches and lower output of re-rolling mills, which, together with the slight increase in bookings from the automobile industry, will keep inventory pressures on prices under check.
The official said that, in the case of the steel mill in question, CRC inventories were down 30-40 percent during July compared to inventory levels in the May-June period, through the output management of re-rolling lines.
$1 = INR 74.90