Indian flat steel industry has seen a series of price hike in the past 3-month. Dealers & traders are expecting a price cut by 1-2% in Apr’14. Moreover, advance VAT payments to tax authorities are creating hurdles for Delhi based traders.
Flat steel market is hoping for price cut for the month of April. Many traders in the North market are expecting manufacturers to cut prices by INR 700-1,500/MT. They believe that a price hike is not justified in the market due to poor demand from the consumption sectors.
[su_quote cite=”Trader in Delhi“]Price hike in flat products is highly unlikely in the market. We are in fact waiting for a price cut of INR 700-1,500/MT in April.[/su_quote]
Flat steel traders in Delhi are haunted with new set of problems as the tax authorities have asked to deposit advance VAT before end of Mar’14. Traders don’t want to block their fund by just depositing advance taxes for stocks which haven’t been sold. In fact, traders have offered a discount of INR 500/MT to sell the old inventories by March-end.
[su_quote cite=”Trader in Delhi“]It more rational to sell the commodity and then pay the advance tax for it, rather than just block the capital by depositing advance tax for items which haven’t been sold.[/su_quote]
Low demand has been a concern for the traders in this region and a price cut in April will make it difficult to clear off old inventory at revised prices.
Traders in Faridabad are also miffed at frequent increase in prices by manufacturers. Some of the traders whom we interacted are facing difficulties in procuring materials and this ‘artificial shortage’ is creating hurdles for many traders. As per a member of Faridabad Iron & Steel Association (FISA), traders are facing difficulties in settlement of payments from clients. Reacting to a question on pricing strategy of manufacturers, he said:
[su_quote]We do not find any logic for price hike; rather we expect the offers to be cut by 2%. We are currently facing much difficulty in settlement of payments from our customers. Random price hike by manufacturers is not justified; this has deeply affected our capital management.[/su_quote]
Meanwhile, flat steel market in Hyderabad has cooled off due to availability of Flat Products. Last week, markets has seen a steep rise in prices due to shortage of materials, however the prices have reversed back to the normal levels due to good supply of materials, said a trader based in Hyderabad.
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