KOLKATA, India, Sept. 27 (Xinhua) -- The fall in international steel prices and imports from Japan and South Korea have forced Indian domestic manufacturers to cut prices by 750 to 1,000 rupees (13.6 to 18 U.S. dollars) per tonne, or two-three per cent, depending on the product and regions, industry sources said Thursday.
An executive from JSW Steel confirmed prices had been lowered for the month. "A lot of steel is being imported from Korea and Japan. The only way to counter this is to reduce prices," he said.
An official from a steel maker said, "This is a double whammy for us. Our margins are getting squeezed because of National Mineral Development Corporation's (NMDC) arbitrary rise in iron ore prices and then we have to cut on prices to fight the influx of cheaper steel from South Korea, Japan and China."
Earlier, Indian steel makers had to combat with Chinese producers. South Korea and Japan have overtaken China in supplying steel to Indian shores over the last few months.
Essar Steel, confirmed a price correction. The company, without elaborating, said, "We have, by and large, rolled over prices with selective need-based correction." An official explained, "Some regions needed price corrections and we have followed up." Tata Steel did not reply to the emailed questions but industry sources confirmed price cuts had taken place across companies.
This particular wave has little to do with the demand issues in India and more to do with withstanding global competition.
According to data made available by the Joint Plant Committee, which is under the Steel Ministry and the government department tracking the sector, real steel consumption from April to August grew by 6.9 percent. And, imports went up by a massive 38.6 percent.
This is not the only problem steel makers are encountering. Iron ore prices internationally are on a downward spiral, but NMDC, the largest iron ore miner in India, has been increasing rates.
Recently, it raised ore prices by 13 per cent while in the international market the commodity is getting cheaper.
The Sponge Iron Manufacturers Association has already approached the steel ministry to intervene against NMDC's price rises.