Indian steel mills compulsion unlikely to be understood by market
Expected price hike by INR 1000-1500 per tonne by Indian mills if not surprising but is likely to go unnoticed by market which is teetering in the peak of season. Badly emaciated by credit starvation despite all the hullaballoo has never really shown any semblance of revival.
In solo performance by the Indian mills being patted by its own band of marketers the truth has looked starker with repeated failure in demand and production. Meager 0.4 % growth in steel consumption over the past 7 months (April- Nov) and growth in steel production by 1.9% y-o-y lagging way behind the global tally of 3.2% putting the final nail in the coffin even before the year draws to close.
Indian economy has slumped incomprehensibly to only 4.8% growth in November. Even though there has been a faint uptick in IIP index by 2.7% in November it has not translated into consumption in real terms as consumer durables, auto and construction are derived demand from the movement in infrastructure fundamentals.
Steel mills apart from breast beating about hiked cost have tried to sell the theory of enhanced demand in the last quarter of FY 13-14 with most of the projects inching towards completion before 31st March. However if the core demand and projects under process being pale shadow of the glorious past it is unlikely to tweak demand.
(www.steelguru.com)
Friday, January 3, 2014
Indian steel mills
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