JSW Steel prunes prices by up to Rs1,000 per tonne as sales slump

JSW Steel Limited today announced a Rs500-750 per tonne reduction in the prices of flat steel products and Rs1,000 per tonne reduction for long products for October amidst stagnant demand and rising imports.

This is the second price cut in the long products announced by the company in the last month.

Almost all domestic steel producers have pruned prices by Rs500-750 per tonne, providing some relief to consumers.

"We have lowered the price by Rs500-750 a tonne for the current month. Following this, the price of the cost of hot rolled coil cost around Rs 36,000 per tonne," an official of a private steel maker said.

Hot rolled coil (HRC) is regarded as the benchmark steel product. As on September-end last year, the price of HRC was around Rs38,000 per tonne.

The move to cut prices comes in the wake of higher domestic production and rising imports and a drop in exports, according to industry officials.

Reports quoting industry officials said there has been a rise in imports of cheap steel products, especially TMT bars, from China in the guise of alloy bars. The imported products come cheaper by at least Rs5,000-6,000 per tonne compared to the domestic prices.

India's steel consumption grew by just 0.3 per cent to 31.17 million tonnes during the April-August period of 2014-15, as the subdued consumption trend for the last couple of years continued.

Imports have also gone up significantly in recent times for both flat and long products mainly from Japan, Korea and China. Construction sector accounts for around 60 per cent of the country's total steel consumption while automobile sector consumes 15 per cent.

While, imports of flat products, used in automotive and consumer durables sectors, from Japan and Korea were on the rise for quite some time now.

SW Steel is the third largest Indian company with a capacity of 14.3 million tonnes, but it is the market maker and generally when it revises prices, the other steelmakers follow suit.