Steel makers roll over prices

Facing a double-whammy of subdued demand and higher imports, domestic steel makers have decided against raising prices for February even as their margins are under pressure.
"There is a tremendous pressure on margins as input costs are higher. However, we are not in a position to raise prices as domestic steel demand has remained subdued for some months now. Higher import is also a huge concern," a senior executive with a private sector steel firm said.
With no change, the price of hot-rolled coil, considered as the benchmark steel product, now stands at around Rs 33,000 per tonne.
"Demand has been naggingly weak all through the current fiscal. The problem has got compounded with the huge spurt in imports. Even long products are coming into indiscriminately making our lives difficult," he said.

India's steel consumption grew by 1.4 per cent during the April-December period of the current fiscal at 55.24 million tonnes, impacted by economic slowdown. Imports, on the other hand, went up significantly to 6.51 MT, up 58.1 per cent over the corresponding period last year.
India used to import mainly high-end flat products meant for automobiles and other sectors. But, now-a-days even long products used in the construction sector are coming in large quantities at a landed cost almost similar to domestic prices.

Easy availability of the raw material at a cheaper costs could have put a lid on surging imports and raise potential to hike prices to ease the pressure on margins.

Indian steel makers are dependent imported coking coal, one of the key raw materials for steel-making. They have in recent months also started alleging shortage of iron ore, another important input, domestically and resorted to imports.
Pressure would perhaps ease for some of the steel firms as the country's largest iron ore producer NMDC has decided to reduce the prices in the range between Rs 200-300 per tonne for the current month.