Local Indian cold rolled coil (CRC) prices have remained at their new peak of INR 56,300-57,000/mt ($764-773/mt ) ex-works and, despite a slight lull in market trading activity and nervous signals emanating from key user industries like automobile, the uptrend in prices is expected to be sustained, sources told SteelOrbis on Monday, December 14.
The sources said that leading integrated steel mills are indicating that price revisions will be sustained and revisions could be expected as early as before the end of the current month amounting to around INR 2,000/mt ($27/mt), and that it is only a matter of time before buyers will return for fresh bookings.
However, a number of market participants have pointed out that there is some uncertainty among domestic automobile manufacturers about whether the demand spike seen during the festival months of October and November will be sustained for the rest of the fiscal year.
It has been pointed out that, traditionally, auto sales tend to weaken after the festivals months and towards the close of the fiscal year and, since most passenger car manufacturers have completed their new product launches for the year and are now back to the drawing board planning for the next fiscal year, CRC bookings from this key user segment could see a pause during the next few months.
In December 2019, the auto industry had posted negative growth in sales over the corresponding month of 2018, and so the industry is nervous over sales in the current month, particularly with several manufacturers anticipating that pent-up demand from the immediate post-lockdown period may have run its course and this could impact raw material restocking during the rest of the fiscal year, which at best would be cautious.
$1 = INR 73.70