The domestic flat steel market continues to remain optimistic on higher prices and bullish market sentiments. SteelMint’s benchmark price assessment of CRC has hit all-time high according to data maintained with SteelMint. This week’s assessment for CRC (0.9mm, IS 513 Gr) grade stands at INR 54,000-55,000/t (exy-Mumbai).
Factors driving domestic CRC prices:
1.Mills announced a steep hike in CRC prices: Recently, in the month of Nov’20 major steel manufacturers have raised CRC prices by INR 1,000-1,250/t and are offering around INR 53,000/t (exy-Mumbai). Prices do not include GST extra @18%. Asides from the point mentioned above, from Jul- Oct’20 onwards Indian mills have significantly raised CRC prices by over INR 15,000/t ($202).
2.Steel mills undergoing maintenance shutdown: Market sources shared with SteelMint that Tata Steel is planning to undergo maintenance shutdown in its CRM mill at its Jamshedpur plant for 15 days from 26th Nov’20 onwards. However, the dates are not finalized yet. Meanwhile, the CRCA mill 1 in the JSW Vijayanagar plant will be operational from Dec. Thus, the crunch in supply is driving CRC prices.
3.Robust demand in the Auto Sector: According to the latest data released by SIAM, passenger vehicle wholesale in India increased by 14.19% to 3,10,294 units in Oct’20 against 2,71,737 units in CPLY
“The month of October saw continuity in sales growth trajectory, drawing on from the previous month. There were marked improvements witnessed across certain segments due to very good festive demand,” SIAM Director General Rajesh Menon said.
4.White goods sales to jump amid festive season: As per media reports, FMCD companies like Haier, LG and Panasonic are expecting an increased demand at well over 20% over the next two weeks till Diwali.
5.Absence of CRC imports- Stockists and importers are not interested in importing CRC, thus traders have to procure the material domestically, leading to hike in the prices in the domestic market. As per data maintained with SteelMint, CRC imports stood at 0.12 mn t in Jan- Sep’20 which was around 0.42 mn t in a similar time frame of the previous year
Will CRC prices increase further?
Major CRC manufacturers are planning to announce further price hikes in the near term since there is a price gap of around INR 1,000-1,500/t between market prices and mill price. In addition to this, the shortage in supplies and higher HRC prices will result in a hike of domestic CRC prices in the near term.
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