Indian flat product market is on traction with an unbroken run of buoyancy for the 10th consecutive week. The fundamentals underlying this sparkling performance have been within rather than without. The peculiarity of price increase is magnified by the record breaking downslide in long product prices in tandem.
Reeling under the impact of recession the Indian steel manufacturers had significantly truncated their capacity to ward off inventory pile up and consequent costs escalation in a tormenting market.
However with the passage of winter, filibusters of revival were sighted as follows:
1. The market exhibited an uncanny resilience in the first quarter propelled by a demand surge from the agricultural sector.
2. Hike in consumption of galvanized corrugated sheets in the household sector preparing to ward off vagaries of monsoon.
3. Auto industry has pulled an unexpected tumult registering sales growth of 2.48% in passenger car and 12.45% YoY in 2 wheeler in May 2009, masking the glaring glitches in this industry.
The above factors caused rebound in confidence of manufacturers to successfully attempt price hikes. It is reported that most of the mills are booked till July and weary of opening counters for August in the prevailing ambiguity.
Although most of the mills are going full hog in this amazing scenario but there are some gaps with SAIL’s Bokaro Steel Plant and Ispat Industries operating at curtailed capacity thereby keeping the prices on crutches.