Steel prices set to fall...
Will Get Cheaper By Up To Rs 600 A Tonne
The Times of India, February 25, 2009, Page 26
TEAM TOI
Steel makers, who choose to pass the full benefit of the 2% point excise duty cut announced on Tuesday, could soon announce price cuts to the extent of Rs 500-600 per tonne on hot rolled coil (HRC) steel and TMT (thermo mechanically treated) bars. For the ‘aam aadmi’, the reduction in steel prices could mean reduction in the construction costs of a house and lower input costs for automobiles, besides other capital goods.
Though Tata Steel declined to comment, JSW Steel said it will pass on the excise duty cut to customers. “This excise duty cut will have a definite impact just like any other reduction on indirect taxes has brought so far. A 2% cut is significant and we will pass it on immediately,’’ JSW Steel finance director Seshagiri Rao said. Industry experts say that excise duty cuts are usually passed on by companies in form of price-cuts, or discounts. Last time when the excise duty was cut, steel companies swiftly passed on the benefits to customers.
After a continuous decline from September 2008, HRC steel is currently selling at Rs 26,500 a tonne while rebars/TMT bars fetch Rs 26,300 a tonne. A 2% excise cut will mean that prices will fall by Rs 500-600, if companies pass on the full benefit, said Pawan Burde of Angel Broking. He said companies’ profitability will not be affected and this excise cut may even support flagging growth of steel.
Domestic steelmakers have raised production from the low levels of November-December 2008 and many expect sales volume to improve on a quarter-on-quarter basis for the January quarter. Vikram Amin, director, sales & marketing, Essar Steel, said, “The reduction of excise duty in the present economic condition will be beneficial as this will have a possibility of increasing demand and give a boost to the sagging economy.’’
Will Get Cheaper By Up To Rs 600 A Tonne
The Times of India, February 25, 2009, Page 26
TEAM TOI
Steel makers, who choose to pass the full benefit of the 2% point excise duty cut announced on Tuesday, could soon announce price cuts to the extent of Rs 500-600 per tonne on hot rolled coil (HRC) steel and TMT (thermo mechanically treated) bars. For the ‘aam aadmi’, the reduction in steel prices could mean reduction in the construction costs of a house and lower input costs for automobiles, besides other capital goods.
Though Tata Steel declined to comment, JSW Steel said it will pass on the excise duty cut to customers. “This excise duty cut will have a definite impact just like any other reduction on indirect taxes has brought so far. A 2% cut is significant and we will pass it on immediately,’’ JSW Steel finance director Seshagiri Rao said. Industry experts say that excise duty cuts are usually passed on by companies in form of price-cuts, or discounts. Last time when the excise duty was cut, steel companies swiftly passed on the benefits to customers.
After a continuous decline from September 2008, HRC steel is currently selling at Rs 26,500 a tonne while rebars/TMT bars fetch Rs 26,300 a tonne. A 2% excise cut will mean that prices will fall by Rs 500-600, if companies pass on the full benefit, said Pawan Burde of Angel Broking. He said companies’ profitability will not be affected and this excise cut may even support flagging growth of steel.
Domestic steelmakers have raised production from the low levels of November-December 2008 and many expect sales volume to improve on a quarter-on-quarter basis for the January quarter. Vikram Amin, director, sales & marketing, Essar Steel, said, “The reduction of excise duty in the present economic condition will be beneficial as this will have a possibility of increasing demand and give a boost to the sagging economy.’’
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