Indians steel companies are considering cuts in capacity utilization if the country’s largest iron ore producer NMDC does not lower its February prices and enable domestic steel mills to fight Russian imports, several company officials and traders told SteelOrbis.
“Steel companies are under tremendous pressure to lower prices. This can only be possible for us if NMDC lowers its raw material prices for February,” R K Goyal, managing director of Kalyani Steel, said.
“If iron ore prices are not lowered, steel companies will have no option but to reduce capacity utilization to ensure some supply side balance in the face of imported steel which is on average 20 percent cheaper than domestic products,” he said.
A spokesperson for Essar Steel commented “Russian imports are hurting Indian steel companies after the crash in the ruble. Unless the government offers tariff protection and raw material input costs are reduced to enable steel mills to adjust their February prices, lowering capacity utilization will become inevitable.”
An Orissa-based trader said that miners in Orissa have reduced prices in line with falling international prices, whereas NMDC with an annual production of 30 million mt maintained its January prices unchanged at INR4,200/mt ($68/mt) for lumps and at INR 3,060/mt ($49/mt) for fines.