Email
Print
ShareKolkata: Steel producers do not expect any excitement on the pricing front, at least in the short term.With Indian producers slashing prices by Rs 1,000-1,500 a tonne in recent weeks and public sector Steel Authority of India dropping prices of flat steel further on Monday, prices are unlikely to move northwards in the current quarter.
While keeping their fingers crossed over a further slide in prices, steelmakers say domestic steel prices could stabilise at current levels in the third quarter. However, much would depend on factors including the global and domestic interest rates, Chinese production and pruning steel imports into the country.
Big players like SAIL and Tata Steel did not seem upbeat on prices. H M Nerukar, managing director, Tata Steel, at a recent interaction in the city, said: "The demand for steel is good, but we would not get great prices at present. It is an open world and there is overcapacity. If prices go up by $50 here and there, there will be some players to supply and bring down prices". He hinted at rising imports of steel into the Indian market.
S K Roongta, chairman, SAIL, also present at the interaction, said prices were being reduced because of the softening global trend. "It is unlikely that steel prices would go up immediately. However, I think prices would stabilise at this level," he said.
Industry sources said that although domestic demand was not a problem, there are reasons for apprehension. "China has continued to offload its excess capacity in the international market. One has to see whether China would choose to cap some of its production during the winter months," a source told DNA Money.
Vishal Agarwal, managing director, Visa Steel, said, "Prices would stabilise, I think, as China is showing some signs of recovery. Inventory levels will be falling as much of the destocking would be complete."
According to a metal analyst, the low-key construction industry in India resulted in flat domestic rebar demand and left prices with "little hope of recovery in November".
The import of flat products in the first five months of the current fiscal has increased 51% to 2.57 million tonnes. Imports have also happened from non-traditional markets like France and West Asia. Exports are unlikely to pick up immediately, which has added to the weak domestic price.
A recent Prabhudas Lilladher report said, "Domestic prices will remain under pressure in the shot term. Domestic producers cut flat product prices by $21-31 per tonne for deliveries beginning November 2009 in response to a fall in global prices and surging imports from CIS and China. We expect domestic prices to stabilise at current levels till the mid/ end of December 2009, since majority of booked quantities would hit the market during these months."
