Following the footsteps of JSW, Essar has also announced a price cut in some products segment, confirm a spokesperson from Essar. Uncertain demand in the economy and possibility of imports has forced to cut prices.
Talking to SteelMint, a senior official of Essar said, “The domestic demand is modest and uncertainties in the domestic market are high. Looking at the current situation in the market, we have decided to cut prices of our commodity grade products and keep prices for other segments unchanged”.
He further added on to say, “We are currently exporting 20-25% of our production to overseas markets. Middle East & Africa are natural markets for our exports. The demand has been good in these markets on account of specific project requirements.”
As per an industry veteran, the effect of price cut is going to be minimal, since commodity grades produced by Essar are not traded in huge volume in the domestic market. Essar mainly caters to the export market due to its specialization on specific higher grade plates. Plate segment is a highly customized industry and many factors affect the actual prices of plates. It is difficult to conclude how much impact this price cut is going to have on the market.
Essar has produced 0.7MnT of Plates between Apr’13 & Feb’14, whereas SAIL has produced 2.1MnT during this period. A graph showing the trend of production per month by Essar is as under:
Source: JPC
Plate segment has seen much smaller volume of trading in the market. A trader based in Kolkata said, slowdown in government projects have affected trading volumes in the market.
“We mainly sell plates to fabrication units who manufacture Railway wagons; we have seen a sharp slowdown in orders from these fabrication units. We are currently not stocking additional materials as of now, due to a poor demand.”
As per some sources in the market, JSPL is planning to hold its prices for the month of April. However this has not been confirmed from company sources till now.
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