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PrintTwo steel companies said they have kept product prices unchanged for November, indicating demand from consuming industries is unlikely to increase immediately.
Steel makers had increased prices for three straight months since August.
“We have decided to roll over prices,” said Jayant Acharya, director of commercial and marketing at JSW Steel Ltd, India’s third largest steel maker by installed capacity.
Jindal Steel and Power Ltd (JSPL), the fifth-largest, also said there is no change in prices this month.
Steel Authority of India Ltd, Tata Steel Ltd and Essar Steel India Ltd did not respond immediately to queries on price revision, but steel companies typically do this in tandem.
Steel makers change or roll over prices at the beginning of every month for the spot market while negotiating contracts with regular clients on a quarterly basis.
The two companies said they are expecting a surge in demand from December as construction activity is expected to rise.
“The demand has just started to come up,” said V.R. Sharma, deputy managing director and chief executive officer, steel, at JSPL.
“Construction demand has a potential to pick up in the January to March quarter,” Acharya said on 29 October on the sidelines of announcing fiscal second-quarter results. “So people will start purchasing in December.”
Steel companies are boosting production although demand stays slack, hoping that the higher volumes will push up revenue.
“Profit will rise due to volume increase, which will also result in lower fixed costs on a per tonne basis, resulting in minor margin expansion also,” said Giriraj Daga, an analyst at Nirmal Bang, a brokerage.
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