Local Indian cold rolled coil (CRC) prices have showed robust gains over the past week, with leading automobile manufacturers returning to restock as they start implementing production ramp-ups for the festival season and with prices finding additional supply-side support after two large re-rolling mills were heard to be facing disruptions in production.
Sources said that benchmark 0.9 mm CRC prices have surged by INR 1,400/mt ($16/mt) to INR 56,700/mt ($643/mt) ex-Mumbai and are up INR 1,000/mt ($11/mt) to INR 60,000/mt ($679/mt) ex-Chennai in the south. According to the sources, three to four of the largest passenger car makers reported large volume bookings as they start to increase assembly line outputs from the end of this month to cater to the expected festival season demand uptick.
They said that large industrial users are anticipating that inventories of finished products will be liquidated over the next few weeks and that the time is right to push higher volumes into the market, necessitating the restocking of raw materials.
At the same time, two large western India-based re-rolling mills are heard to be facing challenges in maintaining outputs for varied reasons ranging from problems of labour to accessing working capital, forcing them to default on delivery commitments. This is expected to trigger some tightening of supplies, prompting market intermediaries to quote higher prices to users.
$1 = INR 88.22