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: a fall in prices there has been discipline from the production side, nobody was willing to sell at low prices. This in turn resulted in prices again picking up in the market.
The steel prices cannot be expected to remain at $600-650 per tonne. The limited supply of iron ore and coal in the world keeps the cost of steel making with less scope for huge correction in the steel prices. In the long-run, I think $400-450 is the range in which the steel prices will stabilise. As far as additional capacities are concerned there is enough demand in the domestic market. India can absorb it and we will not have to rely on exports.
What is your take on full year revenue and margins?
If there is correction in the steel prices the margins will be under pressure. But we will continue our efforts to preserve our margins at current levels, as we are focusing to bring down the cost of production. And as our new capacities will be commissioned, our fixed cost, cost per tonne will come down drastically.
We have given our yearly guidance while announcing FY06 result, which we may not be able to achieve, because our expansion project of 1.3 million tonne was delayed and now it will be operational in November 2006. Due to this our full year production of crude steel or saleable steel will be in the region of 2.8-2.9 million tonne as against our earlier guidance of 3.1 million tonne, still showing a growth of 25% over the previous year. Considering the kind of plans we have, the company in the future can grow at 25-30% in volumes till FY09....
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