Steel imports from countries like Ukraine, South Korea, China and Russia may hit domestic steel makers? plans to tweak prices. According to steel industry experts, over 3,00,000 tonne of steel would come from various countries, which may force steel majors including SAIL, JSPL RINL to revise the prices of hot-rolled coils.
?There have been big orders placed, mainly by the Indian secondary steel producers, particularly from South Korea. This may have a downward impact on the prices,? said Nishith Sharma of Sreelguru.
Steel imports have been moving northwards from the beginning of this financial year. Iron steel imports rose 7% in October to 0.9 billion tonne, while in the April-October period they rose 3% to 6.5 billion tonne against the same period the previous year.
Russia and China are traditional markets, while South Korea has emerged as a new destination for imports. Some of the steel mills, including South Korea?s Hyundai Steel and Posco, have revamped and added hugely to their production capacity. Since the steel demand is not much there, the steelmakers are focusing on exporting it to markets like India.
Steel prices are declining internationally. Indian traders booking bulk orders are getting steel at around $635 per tonne against R37,000. Domestic steel makers though fear that there might be an impact on their prices due to higher import, they said falling rupee may mitigate their risk of losing business to imports. ?We expect there would be no impact on domestic prices as the rupee has depreciated so much. Also, the demand is going to get stronger due to rise in construction activities. So we hope that the prices would remain stable,? AP Choudhary, chairman, RINL, said.
The rupee has fallen over R7 against dollar since August and is at R52.16 per dollar. This would discourage steel traders to buy products abroad.
?A depreciating rupee could make steel imports more expensive thereby protecting the margins of local steel companies. It also opens avenues for us to explore international markets for exporting products,? Sandeep Jajodia, executive vice-chairman and managing director of Monnet Ispat & Energy, said.