Steel makers follow SAIL, slash prices; to evolve strategy today

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New Delhi, Mumbai, Nov 2: Though integrated steel producers led by the country’s largest steel manufacturer, Steel Authority of India Ltd (SAIL) cut prices of flat products in the range of Rs 4,000-6,000 per tonne on Saturday, there are not many takers for it.

Ruias-promoted Essar Steel on Sunday slashed retail prices of steel by Rs 4,000-5,000 per tonne, a day after JSW Steel and SAIL reduced steel prices mainly due to slackening of demand

and correction in the international prices.

“We have reduced the prices for retail segment for Essar Steel hypermart customers by Rs 4,000-5,000 per tonne.” an Essar Steel spokesperson told FE. The retail segment accounts for 20-25% of the Essar’s total sales.

JSW Steel on November 1, 2008 had announced a reduction HR coil by Rs. 5,500 per tonne for November 2008 in line with prevailing international prices.

“The international prices were corrected in the past

two months by around 50% and the domestic prices have been reduced to counter the increasing imports into India,” the company said in a statement.

Similarly, Steel Authority of India Ltd (SAIL), the largest steel manufacturer in the country, also reduced steel prices in the range of Rs 4,000-6,000 across all product categories. With this round of reduction, the average price of hot-rolled steel produced by SAIL comes down to the range of Rs 31,000-32,000 a tonne. The reduced price came into effect from November 1.

The price cut by the manufacturers comes within two days of finance ministry’s announcement of withdrawing a 15% export duty on long steel products.

According to experts other steel makers like, Tata Steel and Ispat Industries are also likely to follow the suit.

Exasperated most steel manufacturers would be meeting their key customers on Monday to discuss what level of prices are acceptable to them. In short, the customers would dictate prices to the producers and therefore more price cuts are in the offing in the next few days.

“We are meeting our customers on Monday to find out what level of prices is acceptable to them. We reduced prices on Saturday but the market is not accepting it,” said an official of a steel company on conditions of anonymity.