Steel companies have offered aggressive
discounts during the quarter to clear large inventories and counter a rebound
in imports. “Although there have been no formal price corrections, we estimate
average realisations to have corrected by $35 per tonne for longs and $20 per
tonne for flats. This would offset the benefit of lower raw material costs for
most steel companies. That said, we expect some benefit of lower coking coal
prices to result in a sequential improvement in operating metrics for JSW Steel
(standalone) and SAIL,†Barclays said.
TATA Steel to concentrate in India operation
TATA Steel Ltd, India’s largest private sector steel maker, is strengthening domestic operations to beat the slowdown in Europe and other developed markets that’s been exacerbated by the slump in Chinese demand.
For Tata Steel Europe, it expects a negative
EBITDA/t of $9/t as compared to $34/t in Q1FY13, led by a decline in European
steel prices. Pension liabilities disclosure at Tata Steel is a key issue to
watch for. In SAIL, IISCO expansion status and wage settlement timeline are key
issues, it said.
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