Indian steel producers reduce prices

Indian steel producers reduce prices

Indian steel producers started announcing price reductions on the back of rising inventories, sources report. Following price reduction of Rupees 500-2'000 ($11-46) per ton announced by Steel Authority of India Ltd (SAIL), private steel producers such as Essar Steel and Ispat Industries announced price reductions of 7-8% due to high inventory levels as a result of weak demand. On the other hand, Tata Iron and Steel Corp did not feel the need to reduce its price since it sold 85% of its output through long-term contracts. As reported by SteelOrbis, due to similar reasons global steel producers such as Mittal Steel, Arcelor, ThyssenKrupp all announced production cuts for the third quarter. However, Indian producers opt to reduce prices instead of reducing production volume in an effort to maintain sales growth. Moreover, analysts predict that Indian steel producers will increase production further to lower losses.