As per CMIE report, domestic steel giants are likely to increase rates further during the month of October on account of a expected upswing in manufacturing as well as infrastructure construction actions.
In its monthly assessment, the Centre for Monitoring Indian Economy (CMIE) stated, “We expect steel companies to hike prices in October-November once industrial and infrastructure construction activity gathers pace.”
During the existing financial year, CMIE anticipates finished steel rates to average 7% higher than during the last fiscal.
It should be mentioned that steel rates have already mounted around 15% during the first quarter of 2011-12.
But, it has sharply reduced its growth estimation for finished steel fabrication for 2011-12 to 9.5% as against 12%.
“The downward revision is due to the lower-than-expected growth in demand for steel in the first quarter and a shortfall of iron ore likely to be faced by the steel units in Karnataka,” it said.
Previously, Tata Steel Managing Director HM Nerurkar stated that domestic steel demand was expected to nurture at around 9% in the existing financial.
The steel giant anticipates steel rates to stay stable, with rates climbing or dropping by Rs 1,000 a tonne for some time.
The majority of firms have inked coking coal agreements for the existing quarterly period at $315 per tonne, which is 40% higher than the year-ago level.
“If the ban continues for long, the plants located in Karnataka will have to cut down production,” the CMIE said.