The Telegraph
Since 1st March, 1999
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Rejig in metal prices

Calcutta, Nov. 2: It was a mixed day for metals in the domestic market. While steel prices softened by Rs 500 per tonne, aluminium companies like Nalco and Hindalco raised rates by Rs 2,500 per tonne on an average.

Both price rejigs mirrored international trends. Nalco and Hindalco raised prices by Rs 2,300 and Rs 3,400 a tonne, respectively, following a rise on the London Metal Exchange.

Steel majors lowered hot-rolled coil (HRC) prices, but most of them declined comment. Except for JSW Steel, most said they were yet to take a call. The last revision took place in early October, when long product prices were cut by Rs 1,000 a tonne.

Industry sources said makers of flat steel products went through a poor patch last month. “A price revision was inevitable. It is only a matter of time before companies make it official,” an industry source added.

Industry observers pointed out that cheap imports from CIS countries had forced domestic players to adjust prices.

In the first six months of this year, hot rolled coil imports stood at 1.1 million tonnes, a figure so high that it prompted steel players, led by the Indian Steel Alliance, to lobby for a hike in import duty from 5 per cent to 15 per cent. However, the Centre declined the request and imports continued to swell

As in all other commodities, the China factor is playing a major part in price movements. The country has imposed curbs on excess exports of aluminium. As a result, globally, the prices are expected to firm up.

However, Nalco and Hindalco said their price revisions followed the LME index only.

On the other hand, steel demand has been slackening in China even as prices have firmed up in the US and Europe.

In order to boost prices, China is planning to curb production by 5 per cent. In September this year, hot rolled coil prices plunged, though there was no demand and supply mismatch. Reports suggest that steel prices now are about $200 per tonne lower than rates prevailing in the US and Europe.

China’s finished steel output stood at 268.8 million tonnes.

However, the industry is hoping that prices will rebound once the self imposed production cut is in place in the fourth quarter this year.

The other factors contributing the steel prices that import from China was down by 16.4 per cent in the first three-quarter while export rose exponentially.

Steel prices in India have been going down during this year before it rebounded in September. Steel majors had increased prices by Rs 500-1,000 a tonne. Industry then hoped that there could be a further increase in prices in coming months.

However, in the next two consecutive months there has been a cut in both long as well as flat products.

From a level of Rs 29,000 a tonne, prices now are hovering between Rs 22,000 and Rs 21,500.

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