Steel body sees prices falling in six months

Steel prices will be headed down near-term, maybe in the next six months, because of inventory swings. Prices may fall to $550 a tonne from $625 a tonne at present."

Peter Marcus, managing partner at the World Steel Dynamics, a consultant group, was commenting about the outlook for global steel prices and its demand in India when he met reporters in Mumbai last week.

"Scrap prices, which had surged, have declined and the US is exporting to the UK as there's a price difference between the two countries. We will see a price fall but they will bottom out at a higher price than the level we saw a couple of years ago," said Marcus, who started his career as a steel analyst in Wall Street in 1961. Marcus analyses global steelmakers and consults investors and companies worldwide.

Talking about India's steel demand, Marcus said, "India does not have the chance to grow as fast as China since the infrastructure spending here is still ordinary. If you look the world, over 80 per cent of the steel market is tied to fixed-asset investment and it's only now that investments in fixed assets in India are pouring in."

"India is a great attraction because of its high grade iron ore. "Anybody who can get government to lease a mine will get a bonanza. It costs $40 a metric ton to buy iron ore while you spend $8 a tonne on an average if you mine it in India.

"India will continue to enjoy the advantage of being a low-cost producer. There will always be export opportunities for the country to the Pacific basin and West Asia," he added.