Indian auto steel demand forecasts remain disappointing
Auto production in India fell 9.3% from the prior year to 4.87 million units in April-May, including passenger cars and commercial vehicles, according to the latest data from the Society of Indian Automobile Manufacturers (Siam). The financial year in India began on April 1st. Passenger car sales fell to an 18-year low in May, down 20.6% from a year earlier to 239,347 vehicles.
Sales have been hit by a liquidity crunch in India's financial sector due to large amounts of outstanding loans, prompting banks and other financial institutions to cut back on mortgage lending. Stocks of unsold vehicles in dealerships also limit car makers' sales.
“The demand for auto steel is unlikely to grow in the next three months,” says a Delhi-based steel wheel supplier. Demand for all consumer goods, including cars, rises seasonally from October, during and after the harvest season, when rural incomes rise, so the October-November festival period is generally considered a good time for new purchases.
According to the latest data from the Ministry of Steel, demand for cold rolled coils (CRC) and alloy steel sheets used in automobile production fell in April from a month earlier. Demand for CRC fell 6.6% from March to 523,000 tons, while overall demand for galvanized sheet (zinc-coated CRC) and galvanized sheet (aluminum-coated CRC) fell 64% to 549,000 tons.