Mr H.M. Nerurkar, Managing Director, Tata Steel Ltd, on Saturday said that though the raw material prices were “inching down”, an anticipated drop in imports may keep domestic steel prices steady. He, however, indicated that steel prices were unlikely to move up.
“The rupee-dollar ratio is not favourable for import. Lower steel imports will help domestic steel companies keep their price steady,” Mr Nerurkar told newspersons on the sidelines of a business seminar organised by the Confederation of Indian Industry (CII) here today.
raw material price
The price of raw materials such as iron ore and coking coal has been steadily inching down.
“We have to see what happens (to steel prices) next quarter but prices of iron ore and coal have fallen significantly in the spot market in last two-to-three weeks.”
The company had reported about 90 per cent drop in its consolidated net profit for the quarter ended September 30, 2011, due to higher raw material costs and lower average selling price of steel.
European demand
“Steel prices have not kept pace with price of raw materials,” he pointed out.
The demand for steel in Europe will continue to remain sluggish due to the ongoing economic crisis in the region.
“European demand has been sluggish. The crisis is yet to unfold fully; only then, it will get resolved. However, I expect the crisis needs to be resolved soon.”
The high input costs and poor demand due to global economic scenario can exert pressure on margins, he said.
“However, I expect input prices to come down. In what proportion it comes down needs to be seen,” he added.