According to sources within the industry, many steel makers are contemplating production level reductions while others continue to try and explore new markets for raw materials. Prices will only stablise if global prices stop rising, an official added.
Tata Iron and Steel Company Ltd (Tisco) vice-president (finance) RC Nandrajog told FE that the rate cut will not really impact steel makers and respite for them will only come if the demand-supply scenario changes in the domestic as well as the overseas market.
Mukand Ltd managing director Niraj Bajaj said that there might be some respite, though global prices are on the rise which is making things difficult for steel manufacturers.
An Essar Steel official said that even though the government has reduced import duty by five per cent, there is no real relief as more than anything what is worrying steel manufacturers is the non availability of coal and coke.
The official further added that with China putting a curb on its export of raw materials and two mines closing down in Australia, avenues of coal are being pressurised.
An industry official said that with demand for steel on a rise and input costs increasing, steel makers are in a fix. Many small manufacturers are now looking at cutting down production.
Steel majors like Steel Authority of India (SAIL) and Tisco are exploring overseas and domestic avenues for raw materials to try and safeguard against shortage of raw materials.
An industry analyst said that though it is too early to comment on whether the rate cut will have any benefit on the steel industry, it may have a small impact though global prices of raw materials are on a high.