Flat product market has groveled for almost 2 years with no respite in sign. The worst ever crisis in Indian flat product market refuses to recede but has taken casualty in the value added products where the secondary sectors have eaten into the market share of majors.

With cheap HRC available aplenty from domestic and import sources most of the CR and HDG manufacturers are able to sell at prices a shade lower than primary mills with lower conversion cost.

Leveraging higher operating margins and lower conversion cost these mills are quietly edging out the majors despite low demand. Western region plush with imported HRC and Northern region fostering on low domestic HRC prices have decimated the market share of primary mills.

Waking up to the alarming situation major mills are likely to reduce CRC and HDG prices or hike HRC prices at least in the hinterland. Since the latter option would be suicidal in the present market condition the former seems a likely option.

Source - Strategic Research Institute

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