Mumbai, March 9: Having raised hot rolled coil (HRC) prices again, this time by more than Rs 500 per tonne, steel makers are being forced by soft international prices to toe a more cautious line on hikes.
Industry sources say current prices, which are hovering around Rs 21,000 a tonne, will hold for some time. International prices, close to $ 400 a tonne, are expected to remain steady and not react to reports that Chinese firms have made their stuff cheaper by $ 5-10 a tonne.
“The market looks encouraging at the moment. However, there is no indication of an increase in April. A clear picture should emerge by the end of this month,” a senior official working for a leading steel company said.
The circumspection comes amid reports that an inventory pile-up in China has been driving down prices of hot coils. The country, which is a major consumer, imports close to 30 million tonnes of steel annually.
Fears that this softness could have an adverse impact on domestic firms is one the reasons why steel shares have been week in recent Dalal Street trading sessions.
According to industry sources, the prices of steel are finding realistic levels after rising from Rs 11,000 per tonne last April. “An encouraging factor is that recent hikes in prices have been absorbed,” sources said. Signs of strong demand, both in domestic and overseas markets, lie in the relatively low inventory stocks.
One of the local companies that saw its fortunes look up in the third quarter of this financial year was Essar Steel.
The company, in the red for some time, reported a 450 per cent surge in its exports at Rs 335 crore from Rs 61 crore in the same quarter of last year. In terms of quantity, sales were up 39 per cent at 4.74 lakh tonnes compared with 3.42 lakh tonnes in October to December 2001.