Demand for cold rolled steel products for automobile and appliance application is expected to remain buoyant backed by fervent demand. The automobile sector has been on a roller coaster ride throughout clocking a YoY growth of 70% in March 2010. There has been an overall growth of 9% in the prices of CR coils in the 1st quarter of 2010. China last year surpassed US as the world’s largest auto market after the government halved consumption tax on small vehicles.
Inventory levels are depleting in China, Korea and Japan. Emboldened by this growth Baoshan Iron & Steel Co, the largest publicly traded steel maker has been raising prices MoM basis and has switched over to fortnightly pricing.
China is expected to add another 9 million metric tons of cold rolling steel capacity this year, increasing supply by about 15% still it won’t suffice to meet the demand from these segments.
The current dip in Cold Rolled prices can be termed as a correction which is likely to vanish. The prices are expected to resurrect very soon despite May being traditionally a low consumption season it is expected to improve towards the second half and maintain its trajectory.