Rising China imports force RINL to slash steel prices

Long products major Rashtriya Ispat Nigam (RINL) has cut prices by Rs 1,000 a tonne in view of cheap imports from China and Ukraine.

Y S Sagar Rao, chairman and managing director, RINL said that even after the price correction, the gap between imports and domestic prices was around Rs 1,000 a tonne. The most-affected categories in long products were rebars and wire rods.

One of the main reasons behind the cheap imports from China was that the country, which was lapping up steel from across the globe over the last couple of years, had turned a net exporter.

Rao said China's own production was 290 million tonne, while consumption was at 250 million tonne. He, however, added that the downward trend was all pervasive and prevailed across international markets.

A Steel Authority of India spokesman said the company would take a call on prices only at the beginning of the month. Rao said in addition to cheap imports the recent rains had dampened demand further. He was hoping that prices would pick up in the second half of the year.

Rao said the company was eyeing new export markets such as Sri Lanka, UAE and part of the US market. Industry sources said although producers' margins would be hit by dip in prices, raw material prices had also eased, somewhat.

Iron ore prices had dropped by Rs 200-300 per tonne over the past couple of weeks. Sponge iron prices, at Rs 10,300 per tonne, had dropped by more than Rs 1,000 a tonne over the past week.

HEAT IS ON

Even after the price correction, the gap between imports and domestic prices was around Rs 1,000 a tonne.

One of the main reasons behind the cheap imports from China was that the country, which was lapping up steel from across the globe over the last couple of years, had turned a net exporter

In addition to cheap imports the recent rains had dampened demand further