Moving contrary to the general flat steel product market, local Indian cold rolled coil (CRC) prices have surged over the past week amid reports of a tightening of supplies as at least a few cold rolling mills have been curtailing or suspending production for maintenance works and have been delaying delivery commitments, SteelOrbis learned from trade and industry circles on Monday, February 28.
Sources said that benchmark 0.9 mm CRC traded prices have gained INR 1,000/mt ($13/mt) to INR 71,400/mt ($957/mt) ex-Mumbai and are up INR 1,300/mt ($17/mt) to INR 71,300/mt ($956) ex-Chennai in the south.
“Supply and delivery disruptions from a few rolling mills are just one factor in the price rise seen last week. Rather than any change in the demand scenario, prices are poised to rise in reaction to inflationary pressures mounting in commodities and energy. Mills will be compelled to increase base prices in March,” a Mumbai-based distributor said.
“In the absence of any positive growth from the demand side, rising prices will lead to a slowdown in trade activity and risks of higher inventories across market segments,” he said.
At least two traders said that the component shortage, particularly of micro-chips, faced by the automobile industry is expected to be aggravated as significant sourcing for the domestic industry was from Ukraine and shipments from the country have already been disrupted and domestic automobile manufacturers will be further hamstrung in increasing output and resultant raw material restocking activities.
Trade circles are expecting local mills to increase March CRC base prices by at least INR 2,000/mt ($26/mt) to pass on cost increases in raw materials and energy.
$1 = INR74.60
