Mood in Indian CRC market turns nervous amid supply chain disruptions in auto sector

Monday, 09 August 2021 16:30:26 (GMT+3)   |   Kolkata
       

Local Indian cold rolled coil (CRC) prices have been maintained at higher levels after base price hikes by producers earlier in the month, but sentiment is reported to be becoming nervous over disruptions in supply chains in the automobile industry casting uncertainties over bookings in the coming months, SteelOrbis has learned from trade and industry circles on Monday, August 9.

Producers have pushed up base prices for CRC to INR 87,000-88,000/mt ($1,175-1,189/mt) ex-works in early August.

However, trade and producers circles pointed out that the automobile industry is facing disruptions in its supply chains, particularly in the global sourcing of microchips. Although it is too early to forecast how this situation is going to unfold, the shortage of imported microchips has already been forcing automobile companies to tweak their output planning to meet festival demand in the September-November period and risks to sustaining raw material restocking are becoming more distinct.

It has been pointed out that the risks of supply chain disruptions and auto companies reworking CRC booking plans would impact integrated steel mills’ pricing more compared to the pricing of standalone re-rolling mills which have locked in the bulk of their output in long-term supply contracts.

However, a section of the market has discounted any possibility of sellers adjusting prices immediately. This would at least impede any plans of further increase in base prices in September and producers are more likely to reduce cold rolling mill outputs and increase sales of hot rolled coil (HRC) in local and overseas markets, which have been showing a revival.

$1 = INR 74.00


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