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Indian steel industry is expected to report subdued result for Q3 - Report
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Monday, 21 Jan 2013
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Business Standard reported that the steel industry is expected to report subdued results for the 3 months ended December 31st amid falling demand and higher raw material costs.

An industry official said that analysts believe the growth in volumes will not translate into improving margins for the companies as steel prices are not seeing any signs of revival. A couple of steel makers tried to increase prices in January, but rolled most of it back as demand languished.

Mr Abhijit Mitra and Mr Neerav Bagaria of ICICI Securities in a recent report said that the volume growth in the sector would be meaningful from companies like Steel Authority of India Ltd and Jindal Steel and Power Ltd, however, a decline in margins in the third quarter would impede margins.

Thet said that “TATA Steel is expected to post a decline of INR 500 per tonne on a QoQ basis in realisations in the Q3. The company in particular has failed to pass through any major price increase in the quarter.”

Even though demand for steel looks weak, steel makers have continued to increase production. Steel production at JSW Steel’s Vijayanagar plant in Karnataka went up 8% in the Q3 of the current financial year against the corresponding period last year. TATA Steel produced 2.09 million tonnes steel in the quarter, up from 1.93 million tonne a year ago.

It said that “We expect NMDC and TATA Steel to post muted numbers for the December quarter due to lower volume offtake. We expect volumes to improve in the March quarter due to seasonal demand.”

Source - Business Standard


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