The Hindu Business Line : Steel prices may be cut from Sept

Price revision
SAIL will have its pricing meeting on Wednesday or Thursday.
Essar Steel, Ispat Industries and Jindal Vijaynagar non-committal on the issue.

New Delhi , Aug. 29

Domestic manufacturers of hot-rolled steel are likely to reduce prices from September 1. However, the quantum of reduction is yet to be decided and is likely to be finalised within the next two days.

According to industry sources, the buyers have been sounded out by the manufacturers that the prices could go down to the extent of Rs 750 to Rs 2,000 per tonne depending on grades.

At present, the average price of hot-rolled steel is approximately Rs 28,000 per tonne, including freight, but excluding excise and taxes.

The largest steel maker in the country Steel Authority of India Ltd (SAIL) will have its pricing meeting on Wednesday or Thursday, sources said.

Officials in Essar Steel, Ispat Industries and Jindal Vijaynagar, however, were non-committal on pricing issue.

"A price revision is certain but we cannot comment on this before the next month," a senior official in one of these companies told Business Line.

SAIL officials pointed out that, "prices may be cut marginally in the beginning of September but is likely to be notched up again from the middle of the month."

According to Mr S.N. Mathur, General Secretary of the Cold Rolled Steel Manufacturer's Association (Corsma), "Our members who are all buyers of hot-rolled steel have been told by these companies that prices could go down by up to Rs 2,000 per tonne from next month."

According to a director in one of the largest secondary steel making company that sources steel from all the five primary steel makers, "The effective prices are bound to come down from September. Only the format is to be seen whether they would do it by raising rebates or cutting the listed price."

According to market sources, Essar and SAIL are likely to cut their spot market prices, while Ispat and Jindal will continue to export while cutting domestic prices and Tata Steel would probably go in for a revision of its non-long-term contracts.

Officially steel prices were reduced in November 2005. Since then prices went up steadily, but in May this year effective prices were reduced as the companies increased the rebates. After that it again went up in phases during July and August this year.