The domestic automobile industry which was battered by the slow demand in the past few months had seen some relief owing to an excise duty cut on automobile products. As per latest data revealed by industry body SIAM, the industry produced 1.81 million vehicles in February, 2014 as compared to 1.73 million vehicles in the same month last year. Domestic car sales have seen an improvement of 1.39% in February.
Experts believe that this excise duty cut has led to positive sentiments for the industry and this will increase the consumption of flat steel products in the near future.CRC which is one of the products used in the automobile industry has seen shortage across trading regions.
Some market participants speculate that the excise duty cut on automobiles might have triggered buying interests from many auto ancillary industries. As per our conversation with an official from Uttam Galva, there has been a shortage of CRC products in Maharashtra market.
[su_quote cite=”Spokesperson from Uttam Galva”]We haven’t expected such shortage in the market. We think that the duty cut on automobiles have triggered buying interest from auto ancillary industries. CRC inventory has almost dried up in the market. This shortage has put some pressure on CRC prices as well.[/su_quote]
A trader based in Ahmednagar too confirmed the shortage of CRC products.
[su_quote cite=”A trader based in Ahmednagar”]We are seeing some shortage in the market for CRC products. Prices are trading much higher as compared to normal trading due to shortage of inventory. We are currently offering CRC at INR 53,000/MT (including ED, VAT extra).[/su_quote]
Manufacturing of automotive grade steel in India has seen much interest from many steel manufacturers. Companies like SAIL, Tata & Bhushan have ventured aggressively into this domain by announcing good expansion of capacity for Cold Rolled products to feed the needs of the automobile industry. Automobile industry consumes around 2 MnT of Flat steel products in India.
As reported earlier, many secondary cold rolling mills in north India have either stopped operation or working under capacity due to higher cost of conversion for CRC products. A price trend for CR Coils in Ludhiana for the past three months is as shown under.
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All prices include ED, VAT extra. Monthly average prices are considered.
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