The Hindu Business Line : `Steel prices set to rise in near term'

STEEL COSTLIER: Mr B. Muthuraman (right), Managing Director, Tata Steel, and Mr Koushik Chatterjee, Vice-President (Finance), at a press conference in Mumbai on Thursday to announce the Q4 results of the company. — Paul Noronha

Mumbai May 17 With strong demand for steel not being matched by rise in supplies in the near term, domestic steel prices are set to rise in line with global trends.

Speaking to Business Line on the sidelines of a function to announce the performance of Tata Steel, Mr Koushik Chatterjee, Vice-President (Finance), said: "Steel prices rose in the first quarter and are expected to remain at a high in the second half in most markets."

Price control

On whether frequent Government interventions in steel pricing were a cause for concern, he said: "It is difficult to control prices in a free market and the Government has announced it will not intervene. Supply and demand should dictate prices."

Steel companies in March rolled back prices by Rs 1,000-2,500 a tonne after the Government expressed concern over a rise in inflation.

However, in May 2007 the companies marked up prices to cover higher input and freight costs.

"We increased prices by 7-8 per cent in May. However, prices were not revised for long-term contracts," said Mr B. Muthuraman, CEO of Tata Steel.

India's steel demand is expected to go up 10.2 per cent in 2007 against 9.9 per cent in 2006.

Despite fears of a slowdown in economic growth, Chinese steel demand may grow 13 per cent in 2007 while global demand will see 5.9 per cent year-on-year growth to 1,179 million tonnes.

Appointment

Tata Steel on Thursday appointed four Corus Group Plc, UK directors on the Board of the company as additional directors. Mr Jim Leng has been appointed Non Executive Independent Director designated as Deputy Chairman. Mr Philippe Varin has been appointed a Non Executive Director; and Mr Jacques Schraven and Dr Anthony Hayward as Non Executive Independent Directors. The induction of the four Corus directors will bring in a rich and varied experience that would enable it to manage the business of enlarged size and complexity, said a statement from the company.