Local Indian cold rolled coil (CRC) prices have continued to surge with integrated steel mills increasing base prices by INR 2,000/mt to INR 49,500/mt ($674/mt) ex-works in response to tight availability of hot rolled coil (HRC) for captive conversion triggering a cascading impact on tradable prices.
With buoyancy starting to be seen in automobile sales at start of the festival season this month, bookings from automobile manufacturers indicated an uptick and tradable prices increased to the range of INR 52,000-53,000/mt ($708-722/mt) ex-works, while they were not above INR 52,500/mt last week, market sources said.
Standalone re-rolling mills specializing in producing auto grade flat steel products have been facing tight supplies of HRC from integrated steel mills and medium tonnages were being priced higher without any volume discounts on offer.
Domestic auto sales in September this year rose by 28 percent over the corresponding month of the previous year and this pace is expected to gain momentum during the festival months of October-November and manufacturers have been increasing assembly line outputs to meet the short-term increase in dispatches of dealers, and hence the increasing raw material restocking levels.
Similarly, bookings of raw material by all large consumer durable manufacturers are reported to be rising, the sources said.
“Standalone re-rolling mills are only able to book relatively small tonnages of HRC with integrated steel mills, as the latter do not have many volumes for merchant sale. Most integrated steel mills prefer to commit supplies to large contracted buyers and to increase capacity utilizations for their own rolling mills,” an official at Jindal Steel and Power Limited (JSPL) said.
$1 = INR 73.38
