Local Indian cold rolled coil (CRC) prices have surged over the past week as select private steel mills hiked base prices for the second time in the current month even as key user industries like automotive adopt cost-cutting measures, increase prices of passenger cars and drastically reduce raw material restocking, SteelOrbis learned from trade and industry circles on Monday, May 24.
Sources said that JSW Steel Limited and ArcelorMittal Nippon Steel Limited (AMNS) has announced a hike in base CRC prices by INR 2,000-3,000/mt ($27-41/mt), taking the effective tradable level to INR 82,000-83,000/mt ($1,125-1,139/mt) ex-works.
It was pointed out by sources that several passenger car manufacturers, key CRC consumers, have already announced hikes in prices in April-May despite falling sales and had also cut back output from assembly lines and closed down some lines, and have reduced fresh raw material bookings to the lowest levels in the past six months.
However, steel mills have assessed that lower production of HRC in the current quarter and lower availability of inputs for standalone re-rolling mills will offset the fall in demand and support higher CRC prices.
According to Tata Steel CEO, T V Narendran, high domestic steel prices will not impact demand in the medium and long terms. He said that, with steel prices rising in all key markets overseas, Indian steel consumers are getting steel at the cheapest price compared to most other markets.
Prices are high only compared to previous months, but are still significantly lower than in global markets, and steel consuming industries can benefit from comparatively lower prices to become globally competitive in their finished steel products, Narendran said.
$1 = INR 72.83