Steel prices may stabilise at current low levels

Steel prices are likely to remain stable at current levels.

SK Roongta, Chairman, SAIL , said on Tuesday that prices are already at a low and can be expected to stabilise at the current levels going forward.

"Long product prices are already quite low. It is comparable to the prices last year. For flat products, prices were reduced recently. Though sales are still sluggish, I see the prices remaining stable at these levels," he said.

The SAIL Chairman added that the company is targeting 8-10% growth in sales this fiscal, compared with last year. However, last year, after the downturn, sales were at an all-time low and the growth projected this year comes on the back of a low base year.

Roongta was speaking at the sidelines of the World Economic Forum's India Economic Summit. Delivering his address at 'The affordable housing imperative', Roongta urged the Government to focus on building infrastructure and making use of the cheap land around the infrastructure corridors.

Affordable housing

"The land in and around the infrastructure corridors should be used for building affordable housing. There is a lot of land left unused for speculative purposes. Even if domestic steel prices match the lowest international prices, it won't be enough to make houses affordable. 90% of the low income group population is looking for houses in the range of Rs 3-5 lakh. To bring prices down to this level, the cost of land needs to be reduced," he said.

Mr Roongta added that one of the steps the industry can take is to innovate and create products with greater strength. "Products with greater strength give the builders the flexibility to use lower amounts of steel. At the moment 100% of our reinforced steel is in the TMT 500 grade which allows for almost 15% lower use of steel but the cost is around 3-4% higher," he said. 
Taken from Business Line