Steel prices not to come down this month

After slashing prices by around Rs 11,000 per tonne since September last year, domestic steel manufacturers are not going to reduce prices this month.

?Since December saw good sales the general assessment is that the market has absorbed the current levels of price therefore it has been decided not to reduce prices this month,? a steel company official said on conditions of anonymity. The producers would however, take stock of the situation during the middle of the month and if sales improve further there might be a marginal hike in prices next month.

Prices of the base product, the hot rolled coil (HRC) is currently around Rs 31,000 per tonne after producers had reduced rates in December by Rs 1,000-1,500 per tonne.

Steel prices have been declining since September last year and since then every month there have been cuts, with the biggest one happening in November when prices were slashed by about Rs 4,000-6,000 per tonne.

The steel industry is currently undergoing a downturn globally due to declining demand from major consuming sectors like automobile, infrastructure and construction, which has led international players like ArcelorMittal and Corus cutting production. On the domestic front, producers like Essar Steel, JSW and Ispat have also gone for production cuts.

The downturn has had its effect on the world steel production so far with output during in November, 2008 for the 66 countries who report to the World Steel Association declining by 19% than the same month in the previous year.

However, India bucked the trend by registering a 1.9% jump during the month being the only major steel producing country to have registered a growth. November also saw the world?s largest steel producer China witnessing a decline of 12.4% at 35.2 million tonne .

During the first 11 months of 2008 for which figures are available, global steel output registered a marginal 0.9% increase at 1,224.6mt over the same period in 2007. India, however registered a 4.6% jump at 50.56mt. During the same period, China recorded an increase of 2.6% at 463mt.