Demand for flat steel products is currently following a slack trend in the Indian domestic market. Local producers' new offers have changed significantly. Some Indian mills are trying to reflect the recent increases in global flat steel prices in their local market offers, but their new offers have not found much favor in the market. Their offers are heard to be negotiable. In the Indian domestic market, local producer SAIL has recently offered hot rolled coils (HRC) at the price level of INR 37,500/mt, including all taxes. However, as mentioned before, insufficient demand and adequate inventory levels hinder the Indian mills in their efforts to push up prices. It is also heard that transactions below the abovementioned price have been concluded after negotiations and depending on tonnage.
Chinese import offers have registered a slowdown to their rapidly increasing price trend seen last week. Ex-China offers via traders to India for ready stock hot rolled coil (HRC) are heard to be standing at the price level of $645/mt CFR. The cold rolled coil market is observed to be more active than the hot rolled coil market. SteelOrbis has been informed that ex-China offers to India for cold rolled coils (CRC) of 1 mm thickness are standing at $725/mt FOB, while offers for CRC of 0.6 mm thickness are at $765/mt FOB - both for September shipment. Looking at India's automobile sector where cold rolled coils are more commonly used;
Type of vehicles |
Production (FY 2009-10) |
% change over FY 2008-09 |
Domestic sales (FY 2009-10) |
% change over FY 2008-09 |
Exports (FY 2009-10) |
% change over FY 2009-10 |
Passenger vehicles |
2,351,240 |
27.88 |
1,949,776 |
25.57 |
446,146 |
32.89 |
Commercial vehicles |
566,608 |
35.92 |
531,395 |
38.31 |
45,007 |
5.59 |
Three wheelers |
619,093 |
24.56 |
440,368 |
25.92 |
173,282 |
17.03 |
Two wheelers |
10,512,889 |
24.86 |
9,731,231 |
26 |
1,140,184 |
13.54 |
TOTAL |
14,049,830 |
25.76 |
12,292,770 |
26.41 |
1,804,619 |
17.9 |
Table: Production, domestic sales and exports Of Indian automobile industry, (Unit: number of vehicles) (Source:Society of Indian Automobile Manufacturers (SIAM))
Total automobile production in the Indian financial year 2009-10 (ended March 31) increased by 25 percent as compared to FY 2008-09, while domestic sales improved by 26 percent and exports rose by 17 percent. The conclusion we draw from the above table is that the automobile sector in India has continued its stable growth. It could be said that the situation in other sectors is not as bright as in the automobile sector. SteelOrbis has heard from some Indian market players that, even if flat steel demand were strong, inventories would first have to be melted down anyway. Only then will the offers of Indian producers and stockists receive a favorable response.