BL reported that steel traders and consumers feel that Indian steel companies are expected to drop prices by INR 3,000 to INR 5,000 a tonne in December, after keeping it unchanged in November.

Despite demand slowing down, major steel makers such as SAIL, TATA Steel, Essar Steel and JSW Steel have restrained from cutting prices as imports have turned costlier with the rupee depreciating against the dollar.

A trader said that the landed cost of a large shipment of hot rolled coil, booked in June, expected to arrive in India shortly, now works out to INR 35,000 a tonne whereas the EXW price of HR coils is currently at INR 38,500 a tonne.

Mr Arun Agarwal a steel trader from Bhiwani Haryana said that steel prices across the globe have come down sharply following the economic crisis, except India.

He felt that “Postponement of purchases by many buyers in anticipation of a dip in prices is one of the reasons for the present slowdown in demand.”

Growth in domestic steel consumption in the first half of this fiscal slowed down to about 2.5% from 14.5% registered in the corresponding period last year. Off take from major infrastructure and real estate projects has tapered due to the hike in lending rates. Besides, demand from automobile and white good sectors has also been hit by poor consumer spending.

(Sourced from BL)