Local Indian cold rolled coil (CRC) prices have remained stable during the past week at INR 39,500/mt ($521/mt) ex-works as the improvement in sentiments was backed by a slight increase in fresh volume bookings received particularly by re-rolling mills, traders said on Monday, June 15.
Several major passenger car manufacturers have reported an improvement in May sales compared to almost zero sales in April and, with the auto industry slowly increasing output from its production lines, CRC volume bookings have increased slightly, enabling prices to remain stable.
At least two traders have confirmed that a western India-based re-rolling mill with a supply agreement with a southern India-based passenger car manufacturer has concluded a booking for immediate delivery at a discount of 2-3 percent, though this was not confirmed by the time of publication by the seller.
“CRC prices have been stabilized by a slight rise in bookings. Also, integrated steel mills are steadily increasing hot rolled coil export volumes and reducing captive re-rolling, which is easing supply-side pressures on CRC prices,” an official at an Indian steel mill told SteelOrbis.
However, according to a steel sector analyst at a Mumbai-based financial services advisory firm, fresh bookings seen during the past week are unlikely to gain momentum. He said that most automobile manufacturers are selling from existing inventories and, as they increase assembly line production levels, disruptions in supply chain with auto component manufacturing units will be aggravated and this will prevent auto companies from aggressively restocking CRC.
Amid still uncertain demand and manufacturing scenarios, most re-rolling mills will have to bank on supply agreements with end-users and spot trading volumes will continue at very low levels.
$1 = INR 75.80
