SAIL bets big on auto demand Steel Authority of India Ltd (SAIL) is planning to set up a 1.2-million-tonne (mt) cold rolling mill for automobile grade steel at Rourkela. SAIL chairman C.S. Verma said the demand for steel from the auto sector was set to rise as the worst phase for both the auto and steel sectors was over. “We have faced the worst period and I believe from here the level of auto sector play would only go up,” he said. The company is planning to set up a 1.2mt per annum cold rolling mill at its Rourkela Steel Plant at a cost of around Rs 5,000 crore through a joint venture. The state-run company, which is ramping up its steel-making capacity to 24mt per annum from 14mt per annum, has already floated a global tender, inviting interest from potential partners. “SAIL believes that there is a huge potential for such sheets in India and the demand is only going to go up in the coming days,” a company official said. Analysts also believe that the demand for domestic steel is set to increase owing to the high value of the dollar, which makes it cheaper for car makers to buy local steel rather than import it. “Indian steel manufacturers have an upper hand as the rupee is losing ground and import costs as well as freight charges have skyrocketed. Both the auto sector as well as the steel industry stand to gain from this,” auto expert P. Tharyan said. He added that the next year could be better for the auto sector with elections round the corner, “But it depends if the environment is conducive for growth and good economic decisions are taken by the government after the elections.” According to the Society of Indian Automobile Manufacturers (Siam), passenger car sales in October stood at 1,63,199 units against 1,69,788 in the same month last year. “We continue to see a decline in car sales. In today’s economic scenario of high inflation and interest rates, the middle class (the major customers of cars) is the worst hit,” Siam director-general Vishnu Mathur said. According to Siam officials, other than compact sports utility vehicles Ford EcoSport, Renault Duster, Nissan Terrano, entry-level sedan Honda Amaze and Hyundai i10 Grand, most other passenger vehicles struggled to push sales in the festive season. Domestic car sales declined for a record nine months till July this year but grew in August and September.
Posted on: Tue, 19 Nov 2013 07:44:11 +0000