The Hindu Business Line : Steel cos may cut prices in December

Steel prices in the domestic market are likely to come down in December. The reduction would be in the range of Rs 500 to Rs 800 per tonne depending on various categories.

Following the recent fall in international prices of steel the difference between the domestic and international price is currently around $30-40 per tonne. As a result the average landed cost of imported hot rolled steel is currently around Rs 26,000, while the average domestic price is approximately Rs 27,000, sources in steel manufacturing companies told Business Line.

This situation is further fuelled by increased availability of steel in the domestic market as shortages are coming down in the global arena.

According to available information, the prices of galvanised plated steel would be reduced by around Rs 500 and is likely to be effective from the beginning of the month.

However, for hot rolled steel, companies such as Steel Authority of India (SAIL), Tata Steel, Essar, Jindal and Ispat have deliberated among themselves and indications are that they will not make any announcements on the first day of the month.

The South-East Asian market is now dominated by Chinese exports. Simultaneously, the ports in the US and Europe will slowdown from mid-December and will not take fresh consignments. On the other hand, activities in the domestic industry in India increases during the dry winter months, which leads to further increase in imports. "These factors are leading to what we may call a price correction in December," sources in the steel-making companies said.

Sources said that since private sector companies do not maintain inventories and produce as per order, they have decided to watch the order load during the first few days and then take a final call. "This time it may be a departure from the earlier practice of effecting price correction from the first day of the month and instead make the announcements during the second week," they said.

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