Mumbai, Dec 13: One would have expected that steel prices would rise after the notification issued by the commerce ministry to impose dumping duty. As per the proposals, dumping duty would be levied in case the landed price falls bellow Rs 14,300 per mt for Hot Rolled Coils (HRC), Rs 15,000 for Hot Rolled Plates per mt and Rs 22,000 per mt for boiler grade steel. These duties, imposed in the fag end of November, were expected to boast the steel prices. Instead, contrary to expectations, the market price of many important grades of steel has fallen. In the flat segment the most important grade is the HRC (3.15 mm). The price in this grade has fallen by Rs 1152 per mt in last week. As S Maroo, president, Steel Chambers (the governing body of the steel traders) said, the price of HR coils have fallen to Rs 15,760 per mt in last one week--a drop of Rs 1152 per mt. This is one of the biggest fall in prices in last one year in this segment of steel sales. Maroo, cites the lack of demand as the primary cause ofthe fall in prices. Secondly, traders and end users can today import Cold Rolled coils at only $230-$250. This works out to a landed price of Rs 9775 to Rs 10,500, which is less than the prevailing HRC price in India.
The problem out here is that HR is used as an input for CR. Hence if government wants to have a floor price in HR at Rs 14,300 ($336 per mt), then it should have a floor price for CR at Rs 15937.5 ($375 per mt). But that did not happen. Consequently the manufacturers have no option but to reduce the prices. According to latest report available from the secretariat of steel exporters, (Joint Plan Committee), in September, prices of HRC were ruling at the rate of Rs 17,500 per tonne in Mumbai, Rs 18,000 per tonne in Chennai, Rs 15,500 per tonne in Delhi and Rs 15,400 in Calcutta. With severe lack of demand in the month of october, prices in Mumbai fell to Rs 16,912 per mt from Rs 17,500 per mt in September.
In November the prices remained at the same levels as that of October as the entiremarket was keeping its figures crossed over the expectations of the imposition of anti-dumping duties.
But the government notification fell short of market expectations and only a fortnight after the government notification, prices in Mumbai market have dropped.
Hot Rolled Coils are one of the fundamental products of steel.
Apart from production of CR Coils used for automobile section, the HRC coils are rolled to give HR plates which are further processed to give galvanised plates. The drop in price in HR also fuelled a drop in price in galvanised sheet segment. As per the JPC report, prices of 0.63 mm Galvanised Plates ruling in mumbai in the month of september were Rs 28,000.
But today, Jisco, one of the biggest players in GP/GC sheets in India, is selling galvanised sheets (0.63 mm) in Mumbai market at Rs 24000 per mt. In other words, there has been drop in prices of GP sheets by around 15 per cent. One can say that the drop in zinc prices in india by 15 per cent could have precipitated the drop inprice of galvanised sheets. Whatever be the reason traders are quite apprehensive of any rise in price of flat products or its derivatives in the near future.
Nevertheless, the only segment which seems to have gained in price in the last one week is in the longs. Prices of rebars, blooms have on an average gained by Rs 500-Rs 600 per tonne.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
Printer-friendly page
