December 02, 2008

Steel prices expected to remain firm in coming days – Report

ET reported that Indian domestic steel prices continue to remain high in the international markets with a price difference between domestic and overseas steel hovering between INR 10,000 and INR 15,000 per tonne. Moreover, with Indian demand for steel moving faster than the growth in production, prices are expected to remain firm in the coming days.

Mr SK Roongta chairman of Steel Authority of India Limited said that the domestic industry is yet to see the peak of steel prices as prices has been artificially controlled by companies despite an overall surge in input prices. He added that "I feel that the days of low steel prices are over. This is the message that should be given out. I do not see resource prices falling sharply even after the present wave of price rise halts."

He said that "The steel market has changed significantly in the last 12 months. Coking coal prices have shot up by over 200%, scrap price remains high while iron ore prices under negotiated deals have gone up 70% to 95%. Even with this pressure, the industry has put voluntary cap on prices. This situation is not sustainable for a long period."

Mr Roongta said that "While we have to live with higher steel prices now, the solution lies in increasing the production capacity. This could only check any abnormal increase in prices based on speculation and perception of a shortage. I feel that too much should not be made from the present rise in inflation. We should take positives out of the rising inflation as it should make us strive for efficiency and cutting unproductive expenditure. There is ample scope with everyone to cut cost."