Domestic steel prices are unlikely to correct in a big way, Seshagiri Rao, Joint MD & Group CFO of JSW Steel said in an interview to CNBC-TV18. The company reported a strong set of numbers for the December quarter, with net profit soaring to Rs 2669 crore.
“Compared to the global markets, Indian steel price hikes significantly lower and therefore, the landed cost of imports were much expensive compared to the local domestic prices,” Rao said.
Road Transport and Highways Minister Nitin Gadkari has been breathing fire and brimstone against steel and cement companies, accusing them of forming cartels and artificially hiking prices.
He was quoted in a news report as warning steel companies that his ministry would allow use of synthetic fibre and composite fibre bars in place of steel products for building roads and bridges.
Rao said that a steep increase in prices of iron ore was the key reason behind steel prices shooting up.
“A significant portion of increase in steel prices is also driven by high iron ore prices. If we compare global iron ore price increase in percentage terms versus local iron ore prices, they have more than doubled,” he said.
He said domestic demand was quite strong, and so were cost pressures for steel companies.
“Demand is very strong in India, cost pressures are there and in the US and European markets steel prices are still at elevated levels and not withstanding some correction in the Chinese domestic prices, I don’t expect steel prices to fall much,” Rao said.
For entire interview, watch the video
(Edited by : Santosh Nair)
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