For the automobile sector reeling from slowdown, there could be some breather from steelmakers lowering contract prices by 11-14 per cent for the second half (H2) of the financial year (2019-20 or FY20). Some have already sealed half-yearly contracts for the auto segment; others are in the process of finishing them. “The auto industry is an important stakeholder for the steel industry. It is important for us to support them when they are facing challenges,” said a leading steel producer that has already closed negotiations. It added, “It’s in the nation’s interests that both survive and grow. Hence, we support each other.” Posco, which supplies automotive steel to the domestic market, said some contracts had been done and some were pending. In the analysts call after the second quarter results, JSW had indicated that there would be some correction because the first-half prices had been stable for the automotive customers. It is in the process of negotiating contracts. The suppliers who meet the 10 million tonne automotive steel demand are Tata Steel, Tata Steel BSL, JSW Steel, Essar Steel, Posco, and some long product producers. For the past few years, the industry has been consistently focusing on the value-added mix, with a focus on the automotive segment.

(Business Standard)