Local Indian cold rolled coil (CRC) prices have surged during the past week with producers hiking base prices and increasing bookings, led by the automobile industry buoyed by higher-than-expected December sales of passenger cars, leading to reports of rising premiums in some key markets like western India, traders said on Monday, January 4.
According to market sources, integrated steel mills have increased CRC base prices by INR 2,000/mt ($27/mt) to INR 60,800-61,500/mt ($832-841/mt) ex-works. Reports assessed by SteelOrbis from around Mumbai in the west indicated some trades at a higher price of around INR 62,000/mt ($848/mt) ex-works for higher-volume bookings with western India-based integrated steel mills.
Market participants said that most leading passenger car manufacturers have reported higher-than-expected double digit growth in December 2020 sales, surpassing the sales growth registered in the corresponding month of the previous year, and claimed that the traditional dip in sales towards the close of the fiscal year would be avoided as per current trends, prompting the industry to revise their production schedules for the next three months and go in for aggressive raw material restocking.
Passenger car inventories both at manufacturer and dealer ends were down sharply from the previous month and the former were preparing to increase outputs of their assembly lines and this, coupled with expectations that integrated steel mills would go in for another base price hike of around INR 2,000/mt ($27) at least this month, triggered higher bookings received by steel mills.
A Maharashtra-based standalone re-rolling mill with supply contracts with a southern India-based South Korean auto major said that supplies of hot rolled coils (HRC) from integrated steel mills and lower deliveries had prompted the rolling mill to cut down production and charge a premium on immediate deliveries.
$1 = INR 73.11