Indian steel ministry officials feel that Indian steelmakers may cut prices this month because of waning demand and unsold inventory. The report quoted steel ministry officials as saying that hot rolled coil prices may be lowered by as much as 5% (INR 1500 per tonne to INR 2000 per tonne) as increasing interest rates dampen sales of cars and homes and stall power generation projects.

The Business Times report also quoted Mr Niraj Shah an analyst with Fortune Equity Brokers echoing this view by saying that “Local demand has been very weak and, with high interest rates, it's unlikely to recover sharply. With falling global prices and the likelihood of a drop in coking coal prices next month, steel prices are likely to fall.”

But this contradicts JSW Steel vice CMF Mr Sajjan Jindal's expectation of a price increase following a production shortfall at Vijaynagar removing a huge volume from market.

Incidentally, taking this as a clue many traders in Mumbai have already hiked their offers in the last 2-3 days of September by almost INR 2000 per tonne. But due to weak demand neither the buyers have accepted the hike nor it has percolated to other cities, which is a bit strange as Mumbai normally takes lead in HR price adjustments.

Unconfirmed reports also said that a large HRC parcel from a Ukrainian mill has been booked at USD 700 per tonne to USD 705 per tonne level CFR Mumbai.

• [Editor:editor]