On one hand, Steel behemoths of India keep product prices unchanged for Dec, 2013. On the other hand, JSPL increases prices by INR 1, 000/MT.
India’s major Steel makers like JSW, Essar and SAIL have kept prices for their products unchanged for Dec, 2013 owing to subdued demand of steel in domestic market. This will support Steel sector coming back on track and expected uptrend in market demand, towards the end of FY14. On the contrary, JSPL has increased its prices by INR 1,000/MT.
Change in pricing strategy is due to the subdued demand in the market. Even the expected demand during the festive season was not accomplished by the Steel industry and thus resulted in price decline of the metal.
According to the sources, even SAIL has rolled over prices of its various products which are not yet identified individually in the market.
Margins of various Steel companies were also quite low owing to the sluggish demand.
Steel demand growth has only been 0.7 per cent during the April-November period of FY14.
“I don’t think there will be a price increase, but we are also watching what is happening in the international market, where prices are stable right now. Steel demand this fiscal is flat as Steel consuming industries are not growing,” said Joint Managing Director of JSW Steel, Seshagiri Rao.
The overall scenario of Steel industry seems to remain poor even during the rest four months of FY14. It can only change if some major policy decisions are made to push infrastructure growth of the country. General election’s announcement can also help to revitalize Steel demand to a certain extent. As demand for SUVs and cars will increase during elections and it will help in growth of Steel demand in the domestic market. Also, the increased demand growth will be clearly implacable during the first quarter of FY15 owing to lag.