India: Major steel companies may cut prices in the spot market by 5-6 pct next month

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Nov 2008

Steel makers JSW, Ispat and Essar are likely to slash prices of steel in the spot market by 5-6% (Rs 2,000/tonne) next month. This will be the fourth successive price cut by the domestic steel companies in as many months. The price cut is aimed at curbing imports and boosting the demand for domestic products. Steel prices in the domestic market fell 30% from an all-time high of Rs 48,000-50,000/tn in April this year to touch Rs 36,000/tn early this month.

There’s scope for further price cut as the global prices are still Rs 5,000-7,000/tonne below the domestic prices, says a steel analyst.
Since demand continues to witness a downturn, global steel makers are planning another round of price cuts.
Arcelor Mittal Africa, Africa’s largest steel company will reduce prices for the third consecutive month in December. Indian steel producers are likely to follow suit. When contacted, Essar Steel Holdings CEO J Mehra said, “The Indian market is not isolated from the international scene. The demand for and prices of steel are softening globally and this would certainly have some impact on the domestic industry.”
Earlier this month, primary and secondary steel firms cut the prices of steel products by up to Rs 6,000/tonne in an attempt to bring some parity between domestic and international prices. Now that the gap has narrowed down to an extent, there will be a marginal price cut next month, said a person familiar with the development.
“The demand for steel is witnessing a slump, not only in India but across the world. Markets have been determining the prices and will continue to do so. But we are yet to decide the prices for December,” said JSW Steel director (finance) Seshagiri Rao. Speaking to ET recently, Ispat Industries managing director Vinod Mittal said, “We are looking at reducing the steel prices further to help consumers get better rates.”

Source: Economic Times