Steel prices have fallen by $30 per tonne in the past
two months to touch $290 in India following the pile-up
of steel stocks in Chinese ports and the expiry of the
import quota license. This in turn is due to the expiry
of import quotas issued by China.
price fall, however, does not affect the scrips of the
Indian steel corporates listed on the Bombay Stock Exchange
(BSE) as the trend is likely to be corrected with China
reissuing quotas from 24 May 2003.
the past six months, industry sources say, steel prices
have jumped over 50 per cent as China, the largest importer
of steel, increased consumption. China buys more than
30 million tonnes of flat steel annually, more than the
total flat steel capacity of India.
Authority of India (SAIL) officials describe the trend
as temporary. "Though the import quotas issued by
China expired last month, they are scheduled to issue
fresh quotas from 24 May. The build-up is in anticipation
impact of China crisis is very marginal on the steel scrips
on the BSE not much fall in the scrips of the listed
steel companies. It is expected that by the end of this
month the current trend will be changed," says Munzal
Shah, an analyst with Sushil Finance Consultants.
the past two months, the scrips of steel corporates such
as Tata Iron and Steel, SAIL, Jindal Steel, and Jindal
Iron and Steel are moving at around Rs 130, Rs 8, Rs 73
and Rs 140, respectively.
Development Bank of India (IDBI) officials say the situation
is being monitored by financial institutions (FIs), which,
under the corporate debt restructuring, had restructured
loans to steel companies on the basis of a price benchmark.
"We have quoted Rs 15,000 per tonne as the base price
and the current steel price movements is at Rs 18,500
per tonne. It's quite satisfactory."
prices of hot-rolled steel coils (base-grade steel) have
softened, there has been a steady rise in the prices of
other commodities used in steel making. Coke and iron
ore, one of the basic inputs in steel made through the
blast furnace route, have shot up in the last two months.