In 2011, global steel production grew at 6.2%, but between January and July this year it is down to 1%. During this period, output in India clocked 3.4% growth while real consumption in Q1 FY13 grew at 7.8%. Coming to raw materials, iron ore prices have fallen from a two-year high of $184/tonne in April 2011 to $99/tonne (FOB). Similarly, coking coal, which touched $224/tonne in 2011, is down to $160/tonne. In steel, while global prices, both for flat and long steel, have dropped significantly, in India it has not been as bad. It indicates that India can't remain insulated from the happenings in global markets, but being a demand centre, the impact here is lesser than that in saturated Western economies.
he government has promised to spend $1 trillion on infrastructure. Interest rates are softening, or at least there's been no hike in borrowing rates of late. And the situation in Karnataka is settling. Imports have gone up during April-July 2012 (risen to 2.9 mt from 1.9 mt in the same period last fiscal), but prices, both global and domestic, don't suggest any dumping.
There is no issue there. NMDC has a clear-cut pricing policy, approved by its board. We are selling our entire production from Karnataka, and some from Bailadila, too, through an e-auction. But LTA are decided on a quarterly basis and there will always be a difference between short- and long-term prices. Sometimes our customers will be benefited, and sometime they might be put at a disadvantage. If international prices are falling this quarter, the benefits will be seen in the next.
Source: The ET
Leave a Reply