After remaining unchanged for almost a month, Indian flat products prices, this week, have registered a fall of INR 1,000-1,200/MT in traders market.
Although, due to sluggish demand, Indian steel manufacturers have announced rebates of INR 1,000/MT on flat products, traders are still selling their stock at discount price of INR 2,000-2,500/MT.
Current prices for 2.5mm HRC (IS2062) are being assessed at INR 33,500-34,000/MT (ex-Mumbai), INR 34,300-34,500 (ex-Delhi) and INR 35,000-35,500 (ex-Chennai). All prices include excise of 12.5%
0.9 mm CRC (IS 513 Gr.O) is being traded at INR 38,500-39,000 (ex-Mumbai), INR 40,000-40,500/MT (ex-Delhi) and INR 39,000 (ex-Chennai). Prices include excise of 12.5%.
However, traders believe that the prices in domestic market have bottomed out and there won’t be any downward movement in domestic prices further.
Positive Demand Sentiments in Infrastructure Sector
According to a global research report, India’s ‘Make in India’ campaign which involved an investment of USD 87 billion in infrastructure and manufacturing projects is likely to translate in to meaningful steel demand after a long gap of 18 months.
One of the key issues being faced by Indian infrastructure sector is of lack of funds availability. With the increasing NPAs in the balances sheets, banks have become quite cautious in lending funds for infrastructure projects. This has resulted in projects being delayed.
However, Indian government is now inviting Chinese investors to invest in Indian infra sector under public-private partnership agreement. If this scheme materializes, then there is definitely positive demand waiting for steel sector in upcoming months.
Opportunities in Auto Sector
The demand outlook for another steel consuming sector, automobile, is also positive for FY16. The total auto steel demand in FY’16 in India is estimated to be around 5.5-6 MnT. In order to boost demand in this sector, apart from regular steel, steel manufacturers should also focus on manufacturing steel offering benefits such as higher strength, better corrosion resistance and improved formability.
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