Local Indian cold rolled coil (CRC) prices have increased, triggered by producers hiking base prices riding on the back of the robust performance by automobile manufacturers and the steady rise in fresh bookings by the latter, with reports of some bookings being concluded at a premium over base prices, traders said on Monday, November 9.
According to market sources, local CRC base prices have been hiked by producers by about INR 1,500/mt ($20/mt) to INR 52,300-52,500/mt ($704-705/mt) ex-works, but several traders have pointed out that tradable prices have been higher at levels of INR 53,000-53,500/mt ($714-721/mt) ex-works inclusive of a premium for early deliveries for December-January.
Market participants said that sentiment in the automobile industry is buoyant and that expectations are that the 16 percent growth in passenger car sales during the quarter ended September will be surpassed during the October-December period, riding on the back of resurgent sales being recorded by all manufacturers during the current festival period, while the higher output of assembly lines has been ensuring rising bookings of raw materials like CRC.
They said that standalone cold rolling mills which largely cater to the auto industry have been facing a shortage of HRC supplies from integrated steel mills and that a section of the market estimates that the demand-supply mis-match during the current month is an estimated 150,000 mt, which could fuel a further price rise in December, explaining the rush to conclude bookings to maintain higher automobile dispatches to dealers during the current festival month.
$1 = INR 74.20