New Delhi: “JSW Steel, India’s third-largest maker of the alloy, expects stable domestic steel prices in 2010 as rising commodity prices would be balanced by increased production,” its finance chief M.V.S. Seshagiri Rao said on Friday.
Rao said that prices would also be supported as China is expected to export lesser steel compared with 2009 and as demand rises in India.
“Prices for steel are very unlikely to go down, at the same time it won’t go up significantly,” Rao said, expecting a slight upwards bias, because of the cost push.
“Demand will come back, then shut-down production will come into operation. Prices will not go up as production will go up,” he said.
Rao said that the demand for flat steel products remained strong, with rising production of automobiles, where such steel is used. “Demand for long products, used in the construction industry, was currently weak, but would pick up in the coming months,” he added.
India’s automobile sales have risen an annual 15% between April and October and analysts expect strong growth in the year to March 2010.
“JSW Steel would not cut prices in January,” Rao said. The firm has not cut prices in December. Media reports have said sector leader Steel Authority of India Ltd is considering a 3% cut in the month.
The firm, which has an annual installed capacity of 7.8 million tonnes, has a production tie-up with JFE Steel, the world’s sixth-largest steelmaker, and the two firms may take stakes in each other.
“It plans to import 5.5 million tonnes of coking coal in the fiscal year 2010-11, 1 million more than in the current year as it increased steel production,” Rao said.
He said that the firm’s US operations were improving and were currently running at 22% of capacity and this would go up to 30% next quarter.
Shares in JSW Steel closed 0.33% down at Rs1,015.65, broadly in line with the Mumbai market.