India’s top private steelmakers, including JSW and Ispat, have slashed prices of flat steel products sold in the spot market by up to 5% or 1,500/tonne in line with softening prices internationally.

The new prices, which have become effective from November 1, will bring
down cost of raw material for automobile and consumer durable
companies.

Private steel producers’ move to cut prices come close on the heels of
state-run steel producer Steel Authority of India’s (SAIL) decision to
cut prices of flat products by Rs 750-1,500 a tonne across categories
early this week on account to weak global trends. Prior to the cut,
steel prices were hovering between Rs 32,000-34,000/tonne in the
domestic spot market.

“Demand is strong in India. The main reason for downward movement in
prices is correction in markets like China, besides appreciation of the
rupee against the dollar. But, we do not foresee further price drop in
domestic market, as prices of key raw materials, including iron ore and
coal, are still firm,” said JSW Steel joint managing director Seshagiri
Rao.

Steel prices in China, the largest producer and consumer of steel
globally, crashed 25% to $450/tonne level early this month after
hitting a high of around $620/tonne in August.

This set the alarm bells ringing for Indian steelmakers, who fear
higher imports of low-priced steel into the country could adversely
impact consumption of domestically produced products.Citing
appreciation in the rupee against the dollar as the prime reason for
the price pressure, Ispat Industries executive director (commercial)
Vinod Garg said: “We have reduced prices of flat steel products by Rs
1,000/tonne on average.”

Steelmakers including Essar and Tata are, however, yet to decide prices
for the current month.Anticipating that Chinese demand will continue to
grow, steel producers in China had increased production significantly
in August. Chinese steelmakers are now facing a glut situation and
pushing their products into the other overseas markets, including
India. Indian steelmakers are, therefore, also demanding protectionist
measures to curb imports from China.

Source: The Economic India Times

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