Demand for CRC products has shown some growth on the backdrop of improving demand from the auto industry. Market sources anticipate that demand for Flat products is likely to pick up further, as the excise duty cut on automobiles extended to 31 Dec, 2014.
Demand from auto ancillary industry had been quite encouraging. The industry, which consumes around 23% of the total steel consumed in India, is one of the major demand drivers for Flat steel sector.
According to 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”.
The sudden uptick in demand for CRC products was mainly from Original Equipment Manufacturers and demand from open trading was subdued. Demand from profiling industry was also quite healthy. When asked about whether any price rise 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 declined from USD 520/MT to around USD 504-510 /MT FOB Shanghai, thus making imports quite feasible at this juncture.
An importer based in Mumbai stated, “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”.