The Hindu Business Line : SAIL, 3 others cut prices

FOLLOWING heavy pressure on global steel prices four domestic primary steel makers including the Steel Authority of India Ltd (SAIL) have reduced the selling price of hot rolled steel with effect from November.

The other companies that have cut prices are Essar Steel, Ispat Industries and Jindal Vijaynagar.

Industry sources said that though Tata Steel has not yet announced price cuts, they have already informed their customers about an imminent reduction in prices.

However, no formal communications from higher officials of these companies were available because of the holidays.

According to sources in the Cold Rolled Steel Manufacturers' Association (Corsma), the largest user association of primary steel, the prices have been reduced by Rs 500 per tonne in the spot market to approximately Rs 21,000 but what will happen to contracts with monthly adjustment clauses would be clear in a day or two.

This would mean that for the customer, the purchase price would be in the range of Rs 26,000 per tonne including 16 per cent excise duty and freight charges.

"The exact details would be clear in next one or two days but our members have been informed a reduction of Rs 500 per tonne across the board in November prices," top Corsma functionaries told Business Line.

SAIL officials said that prices have been cut by Rs 500 and this would also lead to adjustments in the long-term contracts for November delivery prices.

According to SAIL sources, inventory levels that have piled up would take at least around another month to get exhausted and simultaneously increase in demand is expected to result in substantially higher volumes.

Steel prices soared last year following high Chinese demand with prices peaking in the second half as clients built up stocks amid fears of a shortage.

Steel prices may not see an imminent increase again in view of falling metallurgical coal prices worldwide and could stabilise at the current level with certain minor adjustments on monthly basis for spot prices, SAIL officials said.

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