Steel cos slash prices by Rs 700-1500 per tonne
Domestic steelmakers have cut flat steel prices by Rs 700- Rs 1,500 per tonne to around Rs 27,000 a tonne, in line with the fall in international prices.
Domestic steelmakers have cut flat steel prices by Rs 700- Rs 1,500 per tonne to around Rs 27,000 a tonne, in line with the fall in international prices.
Steel Authority of India (SAIL), JSW Steel and Essar Steel have announced cuts. Tata Steel, however, is yet to take a call on the reduction. Company spokesperson Sanjay Choudhry said, “As of now, there are no changes in our prices.”
Seshagiri Rao, joint managing director and group chief financial officer, JSW Steel, said, “We have cut prices due to two reasons — one, appreciation in the rupee and second, the correction in international prices.”
Rao said international prices have come down by $50-$70 per tonne and are hovering around $540 (about Rs 25,000) per tonne. “Prices are not expected to go down much from here,” he said. Benchmark Chinese steel prices have fallen 20% from a 10-month high on August 4.
The rupee has appreciated 6% against the dollar in the last six months. A stronger rupee makes imported steel cheaper.
Sajjan Jindal, vice-chairman and managing director, JSW Steel, on October 23, said he expected prices to rule in the $520-$580 per tonne band for some time.
Meanwhile, the rise in China’s steel output could worsen the demand-supply equation for steel. China accounts for about half the world’s total steel production.
Steel output in China may rise 10% this year, the China Iron & Steel Association said on Tuesday. Production may rise by 50 million tonnes to 550 million tonnes, the association said in a statement. China may import as much steel as it exports this year, compared with net exports of 48 million tonnes last year, it also said.
The lowering of prices by domestic players will further tighten margins for these firms. Already, in the quarter gone by, companies reported loss in earnings due to subdued prices. Profits of Tata Steel and SAIL shrunk by 50% and 17%, respectively, in the September quarter. JSW reported a 74% increase in steel sales but said that its standalone ebitda grew by just 3%.
Hemant Nerurkar, managing director, Tata Steel, had during the results announcement said, “Realisations have come down from Rs 40,000 per tonne to Rs 29,000 per tonne in the second quarter as compared to the same quarter last year.”
Ebitda for Tata Steel fell by Rs 1,500 crore due to the weaker steel prices. Nerurkar had said that imports are putting pressure on margins.
The sales realisations for JSW Steel too fell 38% in the September quarter compared with the corresponding period last year.
Steel Authority of India (SAIL), JSW Steel and Essar Steel have announced cuts. Tata Steel, however, is yet to take a call on the reduction. Company spokesperson Sanjay Choudhry said, “As of now, there are no changes in our prices.”
Seshagiri Rao, joint managing director and group chief financial officer, JSW Steel, said, “We have cut prices due to two reasons — one, appreciation in the rupee and second, the correction in international prices.”
Rao said international prices have come down by $50-$70 per tonne and are hovering around $540 (about Rs 25,000) per tonne. “Prices are not expected to go down much from here,” he said. Benchmark Chinese steel prices have fallen 20% from a 10-month high on August 4.
The rupee has appreciated 6% against the dollar in the last six months. A stronger rupee makes imported steel cheaper.
Sajjan Jindal, vice-chairman and managing director, JSW Steel, on October 23, said he expected prices to rule in the $520-$580 per tonne band for some time.
Meanwhile, the rise in China’s steel output could worsen the demand-supply equation for steel. China accounts for about half the world’s total steel production.
Steel output in China may rise 10% this year, the China Iron & Steel Association said on Tuesday. Production may rise by 50 million tonnes to 550 million tonnes, the association said in a statement. China may import as much steel as it exports this year, compared with net exports of 48 million tonnes last year, it also said.
The lowering of prices by domestic players will further tighten margins for these firms. Already, in the quarter gone by, companies reported loss in earnings due to subdued prices. Profits of Tata Steel and SAIL shrunk by 50% and 17%, respectively, in the September quarter. JSW reported a 74% increase in steel sales but said that its standalone ebitda grew by just 3%.
Hemant Nerurkar, managing director, Tata Steel, had during the results announcement said, “Realisations have come down from Rs 40,000 per tonne to Rs 29,000 per tonne in the second quarter as compared to the same quarter last year.”
Ebitda for Tata Steel fell by Rs 1,500 crore due to the weaker steel prices. Nerurkar had said that imports are putting pressure on margins.
The sales realisations for JSW Steel too fell 38% in the September quarter compared with the corresponding period last year.