Cold rolled Flat products demand have shown some signs of improvement on account of improving demand from the auto industry. Market sources expect the demand for Flat products is likely to improve further as the excise duty cut on automobiles was extended to 31 Dec, 2014.
The demand from auto ancillary industries had been quite encouraging. The industry, which consumes around 23% of the total steel consumed in India, is one of the major drivers of demand for Flat steel sector.
As per an official of a secondary Flat steel manufacturer, “CRC products are in great demand from auto industry and general fabrications industry. Moreover, there has been a shortfall of CRC products in the domestic market as some of the manufacturers are engaged in exporting CRC products to African & Gulf countries”.
It is to be noted that CR Coils of thickness 1.38-0.38 mm were exported at USD 620-630/MT FOB Mumbai and CRCA (0.9 mm) was exported at USD 638-640/MT FOB Chennai.
The sudden uptick in demand for CRC products was mainly from Original Equipment Manufacturers and demand from open trading was subdued. The demand from profiling industries was also quite healthy. When asked about whether any price hike is expected for CRC products, the official denied any such move as of now.
Meanwhile, it is learned from market sources that demand for galvanized products had been quite strong in the past few months. One of the traders based in Nagpur commented, “Prices of galvanized Flat products have rallied from INR 58,000-59,000 levels to around INR 62,000-63,000/MT within a span of just 3-4 months”.
Market experts believe that pricing pressure on Flat products is likely to continue as the domestic demand has not seen a strong recovery whereas global prices of Flat products had seen a sharp correction. Chinese HRC prices have corrected from USD 520/MT to around USD 504-510 /MT FOB Shanghai, thus making imports quite feasible at this juncture.
While talking to SteelMint, an importer based in Mumbai said, “Currently, HRC imports have improved over the last month whereas CRC imports have seen mild slow down. HRC prices are currently in the range of USD 540-550/MT CFR Mumbai”.
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