Europe crisis, China dumping prompt SAIL to pare prices

Steel major Steel Authority of India Ltd (SAIL) on Tuesday said it has cut steel prices by Rs 1,000-1,500 per tonne across different products which will be effective from Tuesday. ?The price cut is in line with the market situation,? a SAIL spokesperson told FE.

Currently, long products prices in the domestic market range between Rs 27,000 and Rs 29,000 a tonne. Long products are used mainly in the construction industry. Prices of flat products, used primarily in the automobile sector, stands at Rs 36,000-38,000 a tonne.

The steel industry had hinted a price correction in the current month on the back of uncertainty in the European market and dumping of steel from China.

Steel majors including Tata Steel, Essar Steel and JSW Steel are considering a price cut this month. An Essar Steel spokesperson confirmed that the company is considering reduction in prices of its flat product, but is yet to decide on how much will be the quantum of the cut. Steel secretary Atul Chaturvedi on Monday had said, ?The steel prices may further fall by Rs 1,000 a tonne next month mainly due to the present European crisis and slackening demand ahead of monsoon. Prices of long steel products?mainly consumed by infrastructure and construction firms?have already fallen by Rs 5,000 a tonne since April,? he adds.

?However, raw material prices have not fallen significantly, except for a small correction in spot prices of iron ore, owing to the global uncertainty. Hence, this could be a temporary fall in prices as demand is good in the domestic market,? Anil Surekha, executive director-finance, Ispat Industries Ltd had told FE last week.

Jayant Acharya, director (sales and marketing), JSW Steel, could not be contacted. However, he had reportedly said that there was a case for a downward price correction and the company will take a call later in the day. Domestic producers are currently faced with an import scare which has surged by 57% y-o-y and 27% m-o-m, led by a surge in imports of hot rolled and cold rolled products. About 6 lakh tonne of flat steel had entered India in April, 40% of which was from China.

Analysts say, current imports are taking place at $600-650 per tonne CFR prices (this translates to Rs 29,000-Rs 32,000 per tonne) much lower than current market prices of Rs 36,000 per tonne. Steel makers had hiked prices to the tune of Rs 1,000-,1,500 per tonne in January and then by Rs 2,000 to Rs 2,500 per tonne in February, followed by Rs 600 a tonne the month of March following roll back in excise duty by two percentage points in the Budget.

Europe crisis, China dumping prompt SAIL to pare prices

Steel major Steel Authority of India Ltd on Tuesday said it has cut steel prices by Rs 1,000-1,500 per tonne across different products which will be effective from Tuesday.