Tuesday, March 08,
Despite the sharp increase in raw material costs, steelmakers have limited the hike in prices due to uncertainty in demand post-Budget..*
There is uncertainty in the demand from the infrastructure and housing sectors due to rising cost of funds. High inflation and the likelihood of a further rise in key bank rates may force developers to delay projects, said an analyst.
“Major steel companies sign quarterly contracts for their key raw material such as coking coal and iron ore and, hence, we do not expect any impact on our profitability in the March quarter. However, if the slowdown in demand persists, then it may have an impact in the coming quarters,” said a steel company executive.
High crude prices and domestic political uncertainty i.e. the deadlock between the Congress and DMK on seat sharing in the Tamil Nadu elections have dragged the markets to standstill. Market players show reluctance in buying & selling. Income tax payments have further limited their resources.
Fall in global steel demand and consequent fall in prices, particularly after mid-February, has made Indian producers desist from implementing sharp price increases, said a North-based steel trader.
Political unrest in West Asia and North Africa has compounded the problem and many of the Chinese exports have vanished suddenly, forcing them to find alternative destinations, including India, the trader said.
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