TRADE NIVESH Steel prices in India have reached the lowest level since August 2016 due to weak domestic demand and prices coming down in the international market. Analysts have warned of a major impact on the profitability of the steel industry. The price of steel has come down to 34,975 per tonne. Research report by Edelweiss states that it has decreased for the 19th consecutive week. Due to the downward trend in the global market and the demand in the country, prices will continue to pressure.
According to the report, "This reduction in steel prices is shocking." In the last four months, the price of steel has fallen by Rs 6,675 per tonne (16 per cent). Due to this, steel companies will have to face difficulties. The difference in prices of raw material and finished products has also been decreasing since last year.
Another research report by ICICI Securities states that the steel companies' operating profit may fall by 20-25 per cent in the July-September quarter. Demand for steel has come down in the country due to the slowdown in automobile, infrastructure and construction and housing sectors. In such a situation, steel companies are increasing exports to maintain sales. However, the world's big steel exporters like South Korea and Japan have reduced prices by 4-5 per cent. Imports declined 14.6 percent in September, but the international market ..
Ranjan Dhar, chief marketing officer, Essar Steel, said, "In the last few months, steel stocks have decreased due to exports. Stocks may decline further with some improvement in automobile sales on a month-on-month basis. If this trend continues in the second half, the situation may improve for the steel industry. However, if this trend is limited to the festive season then the profitability of most steel companies will be affected.
The country's largest car company Maruti Suzuki has sold more cars in September than in August. Due to the festive season discounts, sales can be good in October as well. The retail sales of the automobile industry were at a 10-month high in September. Experts say that there is a need to increase the dumping duty to prevent further decline in the price of steel due to imports. A senior executive of a steel company said, "The steel companies of the country are being forced to reduce prices due to import."
According to the report, "This reduction in steel prices is shocking." In the last four months, the price of steel has fallen by Rs 6,675 per tonne (16 per cent). Due to this, steel companies will have to face difficulties. The difference in prices of raw material and finished products has also been decreasing since last year.
Another research report by ICICI Securities states that the steel companies' operating profit may fall by 20-25 per cent in the July-September quarter. Demand for steel has come down in the country due to the slowdown in automobile, infrastructure and construction and housing sectors. In such a situation, steel companies are increasing exports to maintain sales. However, the world's big steel exporters like South Korea and Japan have reduced prices by 4-5 per cent. Imports declined 14.6 percent in September, but the international market ..
Ranjan Dhar, chief marketing officer, Essar Steel, said, "In the last few months, steel stocks have decreased due to exports. Stocks may decline further with some improvement in automobile sales on a month-on-month basis. If this trend continues in the second half, the situation may improve for the steel industry. However, if this trend is limited to the festive season then the profitability of most steel companies will be affected.
The country's largest car company Maruti Suzuki has sold more cars in September than in August. Due to the festive season discounts, sales can be good in October as well. The retail sales of the automobile industry were at a 10-month high in September. Experts say that there is a need to increase the dumping duty to prevent further decline in the price of steel due to imports. A senior executive of a steel company said, "The steel companies of the country are being forced to reduce prices due to import."
Comments
Post a Comment