Steel prices still firm despite excess capacity pressure

Market remains soft, even as producers resist traders’ demand for cut in prices.

There is over-capacity in the steel industry but prices are still holding up, with many producers denying moves to cut prices.

World Steel Association (WSA) figures indicate global production was 122 million tonnes in April, an increase of 35.7 per cent over April 2009. The world’s largest steel producer and consumer, China, saw a 27 per cent increase in crude steel production to 55.4 mt, the highest it has ever done in a single month.

The market is still soft and traders have been pressing for a price cut, but mills are not relenting.

Earlier this month, prices of flat steel—used in the automobile and white goods sectors—were cut by Rs 2,000-3,000 a tonne.

The cut was driven by the euro crisis and China’s tightening policy. China’s Baosteel, regarded as a benchmark for the steel industry, cut July prices by 10 per cent in June.