Tata Steel expects a sharp rise in steel prices during the current fiscal on the back of the economic recovery and strong performance by consumer industries like infrastructure and automobiles.
"With economic and steel market conditions becoming more favourable and the steel producers needing to recover the rise in input costs, it is anticipated that there will be a strong rise in steel prices in 2010-11," the company said in its latest annual report.
Domestic steel firms saw prices coming down by up to Rs 6,000 a tonne to around Rs 27,000-33,000 during the past few months.
Buoyed by expected strong performances by consuming segments like automotive, construction, infrastructure and capital goods, steel consumption is expected to increase by more than 10 per cent this fiscal, it said.
The report stated that the global economic downturn is set to recover at a faster and stronger rate than expected earlier, and the global consumption of steel is expected to be 1.23 billion tonnes in 2010 -- an increase of 10 per cent over 2009.
On the European market, it said that demand was expected to rise by 15 per cent this fiscal.
"The rebound is expected to raise apparent consumption by 15 per cent year-on-year," the report said, pointing out that European steel demand declined by 24 per cent in 2009-10 due to less consumption by steel-using sectors.
"Exports will continue to be the key driver for economic growth, as the depreciation of the euro is likely to increase the competitiveness of EU industries," the report noted.
Stating that the demand in Asia is growing, company chairman Ratan Tata expressed hope that major mining companies, which produce key ingredients such as iron ore and coking coal for steel making, will adopt a "responsible perspective" and not elevate prices "opportunistically".
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