Steel stocks shrug off rollback in price hike

Steel stocks shrug off rollback in price hike

Shares of top three steel makers recovered from early fall, and were now up between 0.12% and 0.58%, despite agreeing to cut price between Rs 500-1,000 per tonne with immediate effect.

Tata Steel gained 0.58% to Rs 790, off its day’s low of Rs 740.05; Steel Authority of India rose 0.12% to Rs 214, off its day’s low of Rs 207.10 and JSW Steel rose 0.17% to Rs 1142.25, off its day’s low of Rs 1100.35, at 10:49 IST on BSE.

Tata Steel saw volumes of 2.73 lakh shares on BSE. Steel Authority of India and JSW Steel witnessed volumes of 5.21 lakh shares and 17,481 shares respectively on BSE

Meanwhile the BSE Sensex was down 120 points or 0.68% to 17,646.85 on weak cues from the global markets. US stocks dropped on Thursday, 14 February 2008, as the credit crunch surfaced unexpectedly in the municipal bond market and after the Federal Reserve Chairman Ben Bernanke said that he sees sluggish economic growth ahead.

Following a meeting with union steel ministry on Thursday, 14 February 2008, integrated steel producers agreed to cut price between Rs 500-1,000 per tonne with immediate effect. The price of TMT bars and rounds have been cut by Rs 1,000 per tonne while hot rolled coils have become cheaper by Rs 500 per tonne. Most steel producers had increased price by an average Rs 2,500 per tonne with effect from February 2008, following rise in input costs like iron ore, coal, gas, crude oil, rail and sea freight.

Earlier, in January 2008, steel makers had raised prices by an average Rs 500 per tonne. The key objective behind the Government intervention in the rollback of prices was to provide relief to the common man from the rising steel prices.

This is a second rollback in the current financial year. In March 2007, at the behest of the government, the industry went for a partial rollback to rein in inflation.

Meanwhile steel ministry on behalf of producers will has written to finance minister P Chidambaram to consider reducing excise duty on steel from present 16% to 8%.

Tata Steel’s net profit rose 0.5% to Rs 1068.58 crore on 11.3% growth in net sales to Rs 4973.92 crore in Q3 December 2007 over Q3 December 2006

Steel Authority of India posted 31.50% rise in net profit to Rs 1934.66 crore on 12.41% rise in total income to Rs 9,847.64 crore in Q3 December 2007 over Q3 December 2006.

JSW Steel posted 0.30% fall in net profit to Rs 328.18 crore on 12.10% rise in total income to Rs 2563.08 crore in Q3 December 2007 over Q3 December 2006.