Automobiles Check 1

Despite the increasing demand from the automotive industry, which recently reported a significant increase in sales, steel players are yet to capitalize on this demand, the pressure on international prices and excess capacity in China have prompted domestic firms to cut prices of flat products.

Flat steel prices saw a fall of INR 1000 per tonne in the past two months. Largest steel producer in the country, Steel Authority of India Ltd had lowered its prices for flat products again around INR 500 per tonne. However, others have not decided on any price cuts yet.

Growing at a rate of 20% to 25% a year, car production in India will increase in coming years. Of the total 4.1 million tonnes cold rolled coils produced in India, 2 million tons is consumed by the automotive industry in India.

Players Steel said demand for flat steel products increases as the top line of the automobile industry is growing. Moreover, the expected volume growth in new contracts that are set for the renewal of the automotive industry. However, prices are expected to remain at current levels.

Although expected that contracts for steel automotive companies to be signed at higher prices for the next six months, manufacturers say steel prices are expected to remain at current levels due to pressure on international prices.