Domestic steel demand is expected to grow at a compound annual growth rate (CAGR) of 10-11% and is most likely to double by 110 million tonne by FY16.
Director at Tata Sons, JJ Irani, said that steel demand in India was far exceeding the supply in the country and added that he expects steel prices to continue its gradual upmove.
The government had earlier withdrawn duty drawback rates by 25-30%, which caused steel producers to hike the price of finished goods by Rs 1,200-1,500 per tonne.
China, the world’s largest producer and consumer of steel recently saw a cut in production; this setback has been healthy for global steel prices. But, Irani expects Chinese production to soon be back to its normal levels. He, however, feels this wouldn’t be a disruptive force to steel price. Irani added that he sees global steel prices breaching USD 700 per tonne.
Illegal mining has given rise to state governments asking for a ban on iron ore exports. JJ Irani feels a ban on export is necessary. The central government, however, says that imposing a ban on iron ore exports would be unfair.
Source: Money Control
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