Local Indian cold rolled coil (CRC) prices have surged over the past week in reaction to base price hikes announced by large mills, rapid restocking by traders and renewed large volume bookings by industrial users as import options have become risky in the wake of geopolitical tensions and supply disruptions.
Sources said that benchmark 0.9 mm CRC prices have gained INR 3,000/mt ($32/mt) to INR 61,100/mt ($651/mt) ex-Mumbai and are up INR 1,500/mt ($16/mt) to INR 65,000/mt ($693/mt) ex-Chennai in the south.
According to the sources, large industrial consumers led by automobile manufacturers are seen to be increasing volume bookings as several have been reducing import dependency owing to rising freight rates and increased landed prices of imported CRC. At the same time, automobile companies are bullish over maintaining double-digit sales growth in the current month, instilling greater confidence in building up raw material inventories.
“Despite the steady rise in price, we feel there is a need to remain cautious because global volatility from the war in Middle East can manifest in many macroeconomic risks. The primary one being high energy costs triggering inflationary pressures and leading to demand depression. There is only so much cost pressure that the market can absorb without a correction,” a Mumbai-based distributor told SteelOrbis.
“In our assessment, CRC prices can go up by another INR 1,500/mt ($16/mt) before the market begins to show resistance from buyers. Whether this leads to a definitive correction is still not clear,” he added.
$1 = INR 93.48