Visakhapatnam: Despite NMDC slashing iron ore prices by 8-9 per cent last week and cooking coal rates plunging from their February peak by over 50 per cent, steel makers are not prepared to cut steel prices. This is primarily because of anaemic domestic demand in the steel market, with construction activities slowing down on account of the monsoon. Iron ore and coal are the key raw materials for steel production and a decrease in their prices generally reflect in steel prices.
After hiking ore prices by Rs 100 per tonne in March to touch Rs 2,425 per tonne for lumps and Rs 2,185 for fines, NMDC kept the rates at the same levels in April, May and June. Last week, it reduced the prices to Rs 2,225 for lumps and '1,985 for fines. Imported coking coal prices hit the roof after Australia was hit by cyclone Debbie — it touched $305 a tonne in April, but subsequently cooled to $160-$170 currently.
Although steel makers got significant relief after a drop in prices of these raw materials, this is not likely to be reflected in the prices of steel for the time being. “I do not think there is any room for price cuts now. In fact, there were two price corrections in May and June. We had cut prices of our products by Rs 1000 a tonne in May and by Rs 1500 a tonne in June to the current levels of about Rs 36,500,” P. Madhusudan, chairman and managing director of Rashtriya Ispat Nigam Ltd (RINL) told this newspaper. If anything steel prices may nudge up next month, as traders will begin to start buying in the post-GST regime and construction activities pick up, he pointed out.
