Local Indian cold rolled coil (CRC) prices gained INR 800/mt ($11/mt) during the past week to INR 44,300/mt ($621/mt) ex-works due to the slight rise in fresh bookings by southern automobile manufacturers, SteelOrbis learned on Monday, February 10.
According to the traders, large integrated steel mills and stand-alone re-rollers are expected to increase base CRC prices by at least INR 1,000/mt ($14/mt) for February to offset higher input costs and in a bid to increase margins as the current fiscal year draws to a close.
Sources said that southern India-based automobile manufacturers have been active in restocking raw material as the companies have reduced their ‘monthly no-production days’ even though passenger car sales continue to post negative month-on-month growth.
“The destocking process by large steel mills over the past three months is almost complete. This enables the steel mills to hike base prices. Restocking by at least a few auto manufacturers is also a positive supporting the imminent higher prices,” a Mumbai-based trader said.
“But demand from consumer durable manufacturers, which accounts for about 10-12 percent of consumption, is still weak. And hence the slight revival in demand is not uniform across user industries and will continue to weigh down volume trading activity in general,” he added.
However, integrated steel mills could also be conservative in increasing base prices in view of the possibility of a further softening in international steel prices due to the coronavirus outbreak in China.
$1 = INR 71.30
