Local Indian cold rolled coil (CRC) traded prices have remained range-bound over the past week amid the persistent negative outlook of automobile manufacturers, with their low capacity utilization levels to last well into the next fiscal year, SteelOrbis learned from trade and industry circles.
Sources said that local traded CRC prices have remained unchanged at INR 75,600-76,600/mt ($1,019-1,032/mt) ex-Mumbai for benchmark 0.9 mm material.
The sources pointed out that, with prices of hot rolled coil (HRC) gaining strength and those of CRC remaining sluggish, the spread between HRC and CRC has narrowed to a two-year low, reducing margins from value addition by re-rolling mills.
It estimated that between October 2020 and October 2021 the spread between HRC and CRC narrowed by 67 percent with CRC prices losing around INR 8,000/mt ($107/mt) while HRC prices touched a historical peak last month, softening only slightly thereafter.
Officials at mills said that the sluggish movement of CRC in the market and rising inventories at standalone re-rollers and narrow spreads are expected to extend well into the new fiscal year alongside extended lower outputs of automobile manufacturers, as the shortage of micro-chips faced by the latter cannot be mitigated in the short and medium terms.
Moreover, on the supply side, domestic major JSW Limited is planning to increase its cold rolling mill capacity from 0.85 million mt per year to 1.80 million mt per year, impacting sentiments due to higher supplies, adding further pressures on prices.
$1=INR 74.20