Local Indian cold rolled coil (CRC) market has showed divergent trend with integrated steel mill concluding bookings at discounts, passing on benefits of lower hot rolled coil (HRC) prices, while standalone re-rolling mills have been maintaining higher price levels having locked in significant volumes in long-term supply contracts, SteelOrbis has learned from trade and industry circles on Monday, July 12.
Integrated mills are heard to have concluded bookings at prices of around INR 82,000-84,000/mt ($1,099-1,125/mt) ex-works, lower than INR 85,000-86,000/mt ($1,138-1,152/mt) ex-works a week ago.
However, standalone re-rolling mills have reportedly maintained higher prices of around INR 90,000/mt ($1,205/mt) ex-Mumbai, with sources saying that most of such re-rolling mills had locked in most of their production in the current quarter in long-term supply contracts with end-users and had little volumes available for retail or spot sales.
Traders said that trade activity has improved over the past week both in terms of volume bookings and a number of deals in the wake of automobile companies steadily ramping up output and most leading passenger car makers announcing price increases for cars over the current and the next month to absorb higher raw material costs.
“The revival in the auto sector is a big positive for the steel industry. The auto industry will propel steel mills in the short and medium term. It is expected that, with higher auto production and higher prices, CRC demand will improve and mills will be able to increase captive conversion of HRC and partially offset weak demand in the market for the latter,” an official from ArcelorMittal Nippon Steel Limited (AMNS) said.
“If the correction in steel prices gains momentum, steel mills will have to increase value-added production like that of CRC, supported by the revival in key user industries,” he added.
$1 = INR 74.64