Industrial News

Steel Authority of India cautions of further increase in prices

2010 February 7

Steel prices were likely to increase further if raw material costs increased significantly, said Steel Authority of India Ltd (SAIL) Chairman, SK Roongta.

SAIL increased flat product prices in February by Rs 500 a tonne. Roongta said, "Prices came down for three months till mid-December. They should be stable now, but if raw material costs go up significantly, prices will increase," he said.

Roongta was speaking on the sidelines of the 8th India International Refractories Congress 2010. Raw material prices have been on an uptrend since December. The government recently approved the auction of coal blocks for captive use. The amendment to the Mines and Minerals Development and Regulation Act would be place in the budget session.

Roongta said, there would be special dispensation for the public sector. "Let us see when the policy comes, which route will suit us best," he said.

However, Roongta welcomed the move to auction coal blocks. "It is part of the reforms in the coal sector. When it comes for free, people are not serious. This will help to get the block developed in time," he said.

SAIL was scouting for raw material assets, as well. International Coal Ventures Ltd, a company formed by five public sector companies including SAIL had been formed to acquire coal blocks. Roongta said, "Our view is that we should make progress on this front, through ICVL if possible. ICVL does not prohibit companies from pursuing individually," he pointed out. He clarified that there no decision on pulling out of ICVL and creating SAIL Videsh.

 

Nickel prices to remain stable in 2010

The fallout from the financial crisis that afflicted the world economy has seen nickel prices fluctuate wildly. LME prices peaked at just over US$52,000/t in May 2007, on the back of strong demand and low stocks, but had fallen by over 80% by the end of 2008, as demand collapsed. By the fourth quarter of 2009, however, prices had recovered to US$18,500/t.

The fall in nickel prices has been largely due to a collapse in demand. Data for the first nine-months for 2009 shows nickel consumption at the world level has declined by 9% year-on-year, as end-users aggressively cut inventories. Output of nickel has also declined sharply. For the first three quarters of 2009, nickel mine production fell by 18% year-on-year, while primary production was down by 6%. Producers responded quickly to the fall in demand, with around a quarter of all production suspended during the first half of 2009.

While both demand and production of nickel declined in 2009, stocks at the LME built up steadily. At the end of December 2009, official stocks at LME warehouses totalled in excess of 150,000t. To put this into perspective, when nickel prices surged to above US$50,000/t, LME stocks totalled 4,700t.