The state-owned steel major Steel Authority of India (SAIL) today ruled out any reduction in domestic steel prices in the near-term, citing the firming global price trend and the rising input costs.

“As of now, the international prices are firm; scrap and coke prices
are ruling high. So, I don’t see any possibility of lowering the prices
in the near-term…Iron ore prices have gone up…Putting some pressure
on cost,” SAIL Chairman S K Roongta told reporters here today.

Domestic steel firms, including SAIL and Tata Steel, had increased
prices of their different products by up to Rs 4,500 a tonne in the
past two months, raising inflationary concerns and prompting the
government to term the price hike as speculative.

However, Steel Secretary Atul Chaturvedi had hoped otherwise and was
anticipating some correction in the steel prices this month.

Terming the “Rs 8,000-10,000 a tonne” hike in the price of long steel
products–used mainly by infrastructure and construction firms–in the
past few months as “not warranted by market conditions,” he said it got
corrected by 3,000-4,000 a tonne recently.

“As far as SAIL is concerned we have not increased our long steel
prices to the extent of the increase in the market price. So, we didn’t
have to rollback,” Roongta said.

But, he maintained that SAIL will cut prices “as and when market conditions demand it”.

On any likely increase in its input cost pressure next fiscal, SAIL
chief Roongta said: “There is a possibility that long-term prices (of
coking coal) may go up in the long-term.”

“We don’t import coke, but we import large quantities of coal. As of
now, we have long-term contracts (till) March, but the new contracts
have to be negotiated,” he added.

Roongta further said the rise in input cost will hit steel producers
without captive mining reserves. “Basically, iron ore prices are moving
up. Since we have captive iron ore mines it will not hit us, but it
will impact those producers who do not have backward integration
towards mining.”

“Also ferro-alloys like ferro-manganese, ferro-silicon, copper, zinc prices have moved up,” he added.

Iron ore, coking coal along with the ferro-alloys are key input in
making steel. Domestic steel prices are hovering in the range of Rs
26,000-35,000 tonne.

Source: Press Trust of India

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