Though prices have gone up by about Rs 3,000 month-on-month, it has primarily been on the back of exchange rate fluctuations. In dollar terms, prices have not increased at all.
Uttam Galva Steel one of the largest manufacturer of Cold Rolled Steel and Galvanized Steel in western India in an interview said prices of flat steel in near term is expected to remain stable with low inventory level.
The market may not see huge fluctuation in steel prices going forward from current levels, subject to dollar-rupee remaining at relatively stable levels, says Ankit Miglani, deputy managing director, Uttam Galva. Though prices have already gone up by about Rs 3,000 per tonne month-on-month, it has primarily been on the back of exchange rate fluctuations, he says. In dollar terms the prices actually have not increased at all and end-user demand has been relatively muted, he adds.
Despite the price hike across all flat products, it has not been completely absorbed thus the domestic sales are not as per normal purchasing patterns, Miglani told reporters But on the exports side, on actual transaction basis there has been a huge opportunity because of the sudden drop in the value of the rupee, exports have suddenly become viable because the domestic market has not fully adjusted to the rupee fluctuation, he adds.
Company is running at 100 percent capacity utilization, it is maintaining relatively lean inventories. “Inventories are not high because there is lack of confidence going forward in improvement in consumption compared to the existing capacity levels which prevail in India,” he further added.
Going forward, we will be at par or better than last year, we are running at 100 percent capacity and dispatches are normalized now. So we will be at least being at par to last year. Q1 was particularly depressed because of two factors, one is that there was a failure in dispatch because of the LBT (Local Body Tax) strike in Maharashtra. Second, we were in the process of implementing new software, now fully SAP compliant and that severely hurt dispatches in the Q1 that has put some pressure.
Also, Government has approved the denotification of Uttam Galva Steel's two special economic zones (SEZs) in Maharashtra.
The decision was taken by the 19-member Board of Approval, chaired by Commerce Secretary S R Rao, in its meeting on August 30,2013.
However, the approvals were “subject to the development commissioner furnishing a certificate in the prescribed format certifying that the developer has either not availed any tax/duty benefits under SEZ Act/Rules or has refunded any such benefits availed by it and subject to the state government furnishing it's no objection certificate to the proposal,” the minutes of the meeting said.
The developer had proposed two zones – IT and biotechnology – in Raigad, Maharashtra. The zones were notified by the government on March 12, 2009, and June 19, 2009.
For both the de-notifications, the developer had cited the reason of general recession in biotechnology sector and local disadvantage.
SEZ's, which were once looked upon as major vehicles for investment and export promotion, started losing sheen after the global meltdown and imposition of minimum alternate tax (MAT) and dividend distribution tax (DDT).
As many as 58 special economic zone developers have surrendered their projects due to various reasons, including global economic slowdown and changed fiscal incentive regime till 31 July,2013.
During April-June, exports from these zones stood at USD Rs 1.13 lakh crore. During the same period, the country's overall exports aggregated to Rs 4.05 lakh crore.
In 2012-13, exports from SEZs account for 29.12 per cent of the country's total exports of Rs 16.35 lakh crore.
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