CorporatePrivate steel makers follow SAIL lead, cut flat prices
A day after Steel Authority of India Ltd (SAIL) reduced flat steel prices, private steel makers — JSW Steel, Essar Steel and Ispat Industries — have followed. Ispat has cut prices by Rs 1,000 a tonne, while Essar Steel has reduced by Rs 700-1,000 a tonne.
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Steel stocks were down after the move. The JSW Steel stock dipped 10.5 per cent to Rs 676.20 and Ispat Industries was down 4.24 per cent to Rs 18.05.
Seshagiri Rao, joint MD and group CFO, JSW Steel, said the reduction was on account of global weakening of prices and appreciation of the rupee, as well as a dip in Chinese domestic prices.
JSW Steel has dropped prices 3-5 per cent across flat products, used in the consumer durables and automobile majors. Tata Steel was yet to decide on prices. Rising imports was a reason behind the price reduction. Sources said: “Non-traditional markets like France exported hot rolled coil (HRC) to India during April-August at average landing price of $456 a tonne, while prices in West Asia and the Far East were lower, at $405-$420 a tonne.”
Prior to the reduction, domestic HRC prices were hovering around Rs 32,000 a tonne. Prices were not expected to slide further, as raw material prices were appreciating.
Rao said spot iron ore prices had increased and coal prices were also strong. The industry expects prices to remain stable for the current quarter and to move up in the next quarter. Anil Sureka, executive director, finance, of Ispat Industries, said prices could move up from January. “December is a holiday month, so prices will start moving up from January. November is expected to be soft as well,” he said.
Though demand was strong in the domestic market, prices were dictated by global trends. The average global HRC prices, which were at $590 a tonne in September, were now at $550 a tonne.
Rao said the demand for flats was strong in the domestic market, as the consumer durables and automobile segments were doing well.