The price of steel in the country will not swing much, and mostly remain stable in the current year, according to home-grown steel major Tata Steel.
“Price will remain similar. It is not going to be jumping here and there. I think, it is going to be fairly stable,” its Managing Director H.M. Nerurkar told PTI.
Though he did not elaborate the reasons to draw his views home, particularly when he himself sees a 6-8 per cent growth in demand during the year, Bank of India Merrill Lynch in a recent report said steel prices in India would remain “under pressure” following January-March quarter.
“We expect domestic steel prices and margins to be under pressure post March quarter as demand seasonally slows post the fourth quarter,” it said in the report.
The average price of hot rolled coil is between Rs. 36,000 and Rs. 38,000 per tonne now.
Spokesperson of a leading private steel firm, however, differs with both as he feels price of the metal is bound to grow, backed by good demand from end-use industries, albeit in a limited way.
“As input costs go up and demand growth gathers pace, the price of steel will increase, but it would be range-bound, not by Rs. 5,000 or Rs. 10,000 per tonne, but by Rs. 1,000 a tonne,” he said.
The official argued that growing imports might resist the domestic firms for effecting a significant hike in the price and going by the current trends, there is no reason to believe that imports would come down.
India’s steel consumption in 2012-13 grew by just 3.3 per cent to 73.3 million tonnes, according to Joint Plant Committee, a unit under the Steel Ministry.
World Steel Association pegs India’s steel demand growth at 5.9 per cent in 2013 to 75.8 million tonnes as monetary easing was expected to support investment activities.
“In 2014, growth in steel demand is expected to further accelerate to seven per cent thanks to the reform measures aimed at narrowing the fiscal deficit, coupled with measures to improve the foreign direct investment climate,” World Steel said.