Steel companies are expected to drop prices by Rs
3,000-5,000 a tonne in December, after keeping it unchanged in November.
Despite demand slowing down, major steel makers such as SAIL,
Tata Steel, Essar Steel and JSW Steel have restrained from cutting prices as
imports have turned costlier with the rupee depreciating against the dollar.
The landed cost of a large shipment of hot rolled coil,
booked in June, expected to arrive in India shortly, now works out to Rs 35,000
a tonne, a trader said. The ex-factory price of HR coils is currently at Rs
38,500 a tonne and totals up to Rs 44,000 with freight, excise duty and other
levies.
Mr Arun Agarwal, a steel trader from Bhiwani, Haryana, said,
steel prices across the globe have come down sharply following the economic
crisis, except India.
“Postponement of purchases by many buyers in anticipation of
a dip in prices is one of the reasons for the present slowdown in demand,” he
felt.
Growth in domestic steel consumption in the first half of
this fiscal slowed down to about 2.5 per cent from 14.5 per cent registered in
the corresponding period last year.
Off-take from major infrastructure and real estate projects
has tapered due to the hike in lending rates.
Besides, demand from automobile and white good sectors has
also been hit by poor consumer spending.
“Our profit margins are already under stress as we were
unable to pass on the incremental cost on the coal, iron ore and fuel to
end-users due to reduced demand which is not expected to revive soon, given the
current financial constrains. A price cut looks likely next month,” said a
steel company official
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