CMIE sees fall in steel prices by September

 “We expect domestic steel prices to dip by around three to five per cent across product categories in the next three months ended September 2009,” CMIE said in its monthly review of the Indian economy.

The domestic prices of steel are already seven to eight per cent higher than global prices which is indicative of the fact that the prices are yet to be bottomed out domestically, it said. CMIE also views that the uptrend in international prices seen in June might not sustain due to overcapacity in the global steel industry and that the domestic steel prices move in tandem with international prices.

“While the prices will remain weak, the revival in steel demand will sustain in 2009-10, driven by healthy demand for long steel products used in construction and the expected pick-up in housing construction in the second half of the year,” CMIE said.

The country’s steel production is expected to accelerate to 6.5 per cent from an earlier estimate of one per cent rise in 2008-09.