SAIL to slash prices of flat products to counter cheap imports

Steel Authority of India (SAIL) has said it will reduce prices of flat products sold in the spot market by around 3 per cent or Rs800 per tonne due increasing threat from low-priced imports.

The move is expected to induce other steel makers including Ispat, Essar and JSW to similarly cut prices of their products. With the all round decrease in flat steel products from December, raw material costs for manufacturers of cars and white goods like refrigerators etc are expected to drop.
According to industry sources, the growing demand for steel is evident from the strong GDP growth in the second quarter, however, the demand remains subdued in several other parts across the world causing prices to come down.

SAIL is looking at cuts ranging between Rs500-800 per tonne.

Currently basic flat steel prices range between Rs32,000-33,000 a tonne in the domestic market but prices of long products used in construction seem to have bottomed out and will stabilise at the current levels according to industry experts.

Steel prices in China, the largest producer and consumer of steel globally, had declined 25 per cent to $450 per tonne last month after a high of $620 per tonne in August. The crash was followed by several large domestic steel companies reducing prices by up to Rs1,500 per tonne during November 2009.

Even with the demand from major steel consuming sectors, remaining robust, Indian steelmakers are concerned over the higher imports of low-priced steel into the country. They fear this could adversely impact consumption of domestically produced products which have become dearer with the rupee appreciation against the dollar.