Domestic steel demand is likely to rise by 9-10 per cent for the 2010-11 fiscal, according to JSW Steel officials. The demand will be driven by the automobile, infrastructure and consumer durables sector.
“Demand from the auto sector looks very promising this year and is expected to increase by 20 per cent from last year,” said Mr Sharad Mahendra, Vice-President, JSW Steel Ltd. He added that raw material prices are also expected to increase in the coming quarter which would continue to be a problem for steel companies. Coking coal prices in the January-March quarter are expected to be $225 a tonne as against $210 currently.
Mr Mahendra was speaking at the sidelines of the mJunction India Steel 2010 summit.
Also at the summit, Essar Steel said that prices of long and flat steel products are expected to rise in the short term to match the increasing raw material prices.
“There is pressure on steel prices to go up to neutralise the impact of high raw material prices,” said Mr Vikram Amin, Executive Director (Marketing and Sales), Essar Steel Ltd.
However, he could not comment on how much the prices would increase by. “It is difficult to comment on the exact price rise as this needs to be negotiated with the customers,” he said.
Costs for iron ore and coking coal have surged this year after the miners moved to a quarterly pricing mechanism. As a result, in quarter two, profits dipped for most steel companies despite increasing sales.