Local Indian cold rolled coil (CRC) prices have breached the INR 50,000/mt ($771/mt) mark during the past week, gaining INR 1,000/mt week on week to INR 51,000/mt ($786/mt) ex-works as supplies have become tighter, with several large mills reportedly pruning booking volumes, traders said on Tuesday, March 27.
Sources said that a combination of factors is contributing to the lower availability of CRC in the market including a mill shutdown at one of the plants of Steel Authority of India Limited (SAIL) and lower flat product output by JSW Limited.
The sources said that most of the mills are reducing the booking volumes being submitted by dealers and this is creating shortage in the market, which has boosted price levels.
However, some dealers have maintained that at least a few mills are deliberately lowering volume offerings for commercial sales in order to sustain the tight supply position and prepare the groundwork for a significant round of base price revisions in the new fiscal year starting next month.
“There is a significant divergence of trend in the flat product markets. While prices in the case of hot rolled coil (HRC) are showing stability amid scarce trading activity, CRC prices are surging and dealers are not getting the required volumes,” a Mumbai-based trader said.
“I would anticipate that local steel mills will announce a hike in their base prices against next month of around INR 1,000/mt for flat products. The concern in the market is that the price increase is coming through supply and inventory management by producers and not as a result of improved demand among end-users,” the trader added.
$1 = INR 64.86