Indian Steel Prices likely to find Support – Manufacturers

• Steel prices have limited scope of correction

• Odisha Iron ore miners may surge prices amid hike in royalty rates

• Coal crisis continues; e-auction fetched high bids

Steel manufacturers in Indian market expect prices to stabilize in coming weeks owing to low inventory and rising Coal & Iron ore prices.

Steel prices, which gained about INR 1,000-1,500/MT in first week of August, have fallen at the end of 4^th week of August.

Speaking to steelmakers and market traders, it was assessed that steel prices are falling in spite the fact that steel mills in secondary sector are running at 50-60% of their utilization.

India produced about 81 MnT of crude steel in FY14, out of which 55% was contributed by primary steel producers and the rest 45% by secondary steel producers.

Rising Input Cost

Manufacturers fear that rising Coal prices in the domestic market followed by increase in Iron ore royalty will certainly elevate production cost. In case, steel prices do not improve, they will be forced further to reduce their production.

Iron Ore Miners pay High Prices from September

Indian government recently cleared proposal of hike in royalty for key mineral including Iron ore and Manganese ore. Markets expect that Odisha based miners may raise their offers by INR 200-300/MT.

Some Buying Interest seen at Low Levels

Speaking to manufacturers, traders & stockiest, it was also noted that some buying interest is seen at these levels. Most of manufacturers believe that there is limited scope of correction.

Current Offers for MS Billet