Global ratings agency Moody's in its latest report has said that steel prices in India are expected to remain under pressure in the current fiscal, but the demand is expected to pick up with an uptick in commercial vehicle sales.
During April-March 2014-15, crude steel production grew by almost 8 per cent to 88.124 MT year-on-year, though India imported 9.321 million tonnes (MT) of steel in April-March 2014-15, an increase of 71 per cent over 2013-14, making it a net importer for the last fiscal. Moody’s however stated that it do not foresee steel imports coming down anytime soon and so there may be pressure on the prices in 2015-16 fiscal.
Moody's has said that subdued domestic demand and rise in imports from China, Russia and Korea had exerted pressure on steel realisations in the last fiscal, however the rating agency expects steel demand to pick up in 2015-16 on the back of an uptick in commercial vehicles sales, particularly the medium and heavy commercial vehicles (M&HCV).
The rating agency sounded upbeat on the performance of two major players in the domestic market -- Tata Steel and JSW Steel -- in 2015-16, saying that the worst phase for the two is over, adding that Tata Steel’s total deliveries in 2014-15 fiscal stood at 26.32 MT, whiles sales of JSW Steel stood at 12.03 MT during the same period. It also said that both companies have been performing better than the market average in terms of steel price realization.