Price reduction despite high input costs.

All the major steel manufacturers were compelled to reduce their prices by Rs.3000-4000 per Metric Ton, despite high input costs. The sluggish demand has resulted in piling up of stocks and the resultant price reduction.

The contract for metcoke and iron-ore has been atleast 20% higher this financial year.

There is no reason for this price reduction to stand and the steel market will see a bounce back in the coming months of the first quarter of this new financial year.

Price Cut in Stainless Steel

It is reported that Taiyuan Iron & Steel Group has released the new price policy for April 2011 delivery.

The company decided to cut the ex factory prices for 304 series cold rolled, hot rolled stainless steel coil and medium heavy plate by CNY 2,200 per tonne averagely; that for 430 series cold rolled stainless steel has remained unchanged.

Meanwhile, the new price policy will be applied to the April 2011 delivery.

(Sourced from YIEH.corp)

Steel may become cheaper by 1000/- per MT

In a reversal of the recent trend, steel prices are set to be revised downwards over the next few days. After an increase by around Rs 2,000 a tonne over the past two months, an adjustment of Rs 500-1,000 a tonne is likely, with retrospective effect from April 1.

There will be a correction downwards, but to what extent we haven’t decided as yet. We will have a better picture over the next couple of days,” said Jayant Acharya, director, commercial and marketing, JSW Steel.

Bhushan Steel would decide tomorrow, but the market would not be able to absorb any more increase, said managing director Neeraj Singal. The move would be in line with the global trend. Shagang Steel, the biggest private producer in China, has announced a cut of around $23 a tonne in hot rolled coil, the benchmark for steel prices, spurred by a weak market. In the domestic market, HRC prices were at Rs 37,000 a tonne.

The dip, however, is expected to be shortlived. “The April-June quarter is normally when there is likely to be an inventory correction,” said Acharya.

Though steel prices are subdued for now, raw material prices are not. The spot price of iron ore is now around $172 a tonne, compared to $160 a tonne in early February. India’s largest iron ore producer, NMDC, which supplies to most domestic steel companies that do not have captive mines, has announced a provisional increase of 10 per cent for the quarter beginning April.

“Raw material prices are not in line with steel prices. In the past two-three weeks, steel prices have taken a dip,” Acharya said.

More, steel companies are in the process of negotiating coking coal contracts for the new quarter. These are likely to be $320-330 a tonne, around 47 per cent over the previous quarter. Steel industry representatives said both, the high raw material and subdued steel prices, were likely to get corrected in the near term. “A review of prices could happen as early as mid-April,” a domestic producer said.

Prices of long product and semi-finished steel prices—primarily used in the construction sector—for instance, have seen an increase of Rs 500-600 a tonne. Secondary producers expect another bout of increase this month. The increase is in anticipation of a revival in construction activities as the new financial year kicks in.