Local Indian cold rolled coil (CRC) prices have remained at higher levels even as uncertainties emerge over a key consuming sector like the automobile industry’s ability to ramp up production and hence to restock raw material, SteelOrbis has learned from trade and industry circles on Monday, March 1.
The sources said that most passenger car manufacturers are facing severe challenges in the global sourcing of electronic components from suppliers and this is expected to throw a spanner in their plans to increase production.
Car makers were already planning capacity utilizations levels for the next fiscal year on the back of improving sales growth, but the shortage of electronic components in global markets has put the industry’s projected production growth at risk, in turn also putting raw material demand at risk.
However, integrated steel mills are seen to be maintaining prices and even planning a base price increase, with market participants expecting a INR 1,000/mt ($14/mt) hike in the near term as producers are forecasting elevated raw material costs.
Sources said that CRC base prices have been maintained in the range of INR 60,000-61,000/mt ($817-830/mt) ex-works, with tradeable prices ex-Mumbai reported higher at INR 61,000-62,000/mt ($817-844/mt).
“Expectations of pricing pressures from standalone re-rolling mills have been belied. The latter are unlikely to have access to cheaper ex-China hot rolled coil (HRC) for conversion, as flat prices are increasing across markets,” a Mumbai-based trader said.
“There may be some depression in demand from the auto sector in the short term, but this will only have limited pricing pressure on CRC producers,” he added.
$1 = INR 73.47