The tendency for continuous reduction in steel following slow demand

Mumbai, Ta: 18 October 2019, Friday

In the wake of sluggish demand, prices of steel, especially hot rolled coals, have fallen below Rs 5 per tonne. Current prices of steel are trading at a three-year low, local market sources said.

The decline in prices has forced the profits of steel companies. Steel prices have been falling for the past six weeks. Companies have been hoping for an improvement in demand for the past few years, but they have not recovered.

Efforts are being made to maintain sales volumes by providing discounts to customers, but huge discounts are affecting margins, a source at a steel company said. Steel exports have been satisfactory.

The price of hot rolled coal has been reduced by 5 per cent to Rs 5 per annum in the current month. Since the beginning of the current fiscal year, there has been a correction of 5.5% of the price till now. If demand remains sluggish, it is believed that there will be no relief from the fall in raw material prices.

Steel companies are expecting steel demand to rise from January, with the government expected to increase infrastructure costs by the beginning of next year.

Most companies do not make profits at the current price of steel, but various measures taken by the government to increase demand in the country may show a slight improvement over the remaining six months of the current financial year, said another head of steel company sales.