Indian steel makers may cut
prices next month due to weakening demand and unsold inventory.
Indian steel consumption is
likely to expand at its slowest pace in three years after the central bank
raised interest rates for the 12th time since 2010. Demand growth may fall to 6
per cent, half of the 12 per cent forecast in May, the Steel Ministry said. 'Local
demand has been very weak with high interest rates and it's unlikely to recover
sharply. 'With falling global prices and the likelihood of a drop in coking
coal prices next month, steel prices are likely to fall.' He added
Hot-rolled coil prices may be
lowered by as much as 5 per cent as increasing interest rates dampen sales of
cars and homes and stall power-generation projects, the people said, declining
to be identified as they aren't allowed to speak to the media.
The Indian carmakers' association
may cut its sales growth forecast for a second time this year should demand
remain stagnant through the next month, Passenger car sales dropped for the
second straight month in August, a trader said.
JSW Steel vice-chairman Sajjan
Jindal's expectation of a price increase following a production shortfall at
the Mumbai-based company's biggest factory, located in Karnataka state. JSW is
facing a shortage of iron ore after the nation's top court limited the mining
of the raw material in the southern province, citing environmental concerns. JSW
Steel may have to shut its main plant should the shortage continue, Mr Jindal
said. The company is operating its 10-million-tonne plant at 30 per cent of
capacity.
“A possible drop in the prices of
coking coal, a key raw material for producing steel, may also prompt Indian
steelmakers to lower prices.” Steel prices in India may recover towards the end
of the year as a strong monsoon this year spurs rural spending, one of the
ministry officials said.
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