MUMBAI (Commodity Online): With Steel prices in India on a downside ride since the beginning of 2012, the industry now faces some serious issues. NCDEX steel has fallen from a high of Rs 34250/MT in early January to currently trade around Rs 31750/MT, a decline of more than 7%.
The Rupee depreciation over much of the last year has been a boon for the Indian steel industry since it made steel imports very costly, which in turn meant that buyers resorted to domestic suppliers. But now with the Rupee gaining strength to near 49 from the previous 53, the industry now faces the threat from lower-priced imports.
This has also renewed the possibility of steel dumping from producers- which means that producers try to sell their stocks at whatever price they can get in order to get rid of their inventories.
Steel makers also face the prospect of higher Iron-ore prices in the coming months and this would squeeze their profit margins in a declining demand situation.
