Boosted by the government efforts to improve sales volume, steel manufacturing companies in the country are expecting to come up with a better performance in the next few months. The industry is trying to improve the June 2009 quarter performance on a sequential basis.
The sales volume for steel companies recorded optimistic results in the June 2009 quarter. On the other hand, the non-ferrous companies were able to increase the price of their products after witnessing demand in the market. The industry expects all metal manufacturing companies to see demand for their products followed by an increase in sales in the June quarter.
Umesh Shah, Director of Special Metals, a mid-sized stainless steel products manufacturer in Mumbai, says, “Government spending on infrastructure development is a major factor that has worked in favour of the steel manufacturers in the country. The metal prices of most companies have shown improvement on a quarter-on-quarter basis. Most metal manufacturers have also resorted to aggressive cost-cutting measures during the past nine to ten months owing to the acute demand slump.”
 Marginal improvement
The sales volume of Tata Steel showed improvement during the June 2009 quarter, which is around 27% higher than that of the same period last year.
Steel prices haven’t yet recovered fully owing to the global financial meltdown and still remain around 40-50% lower than the previous year’s prices.
Jitendra D Angara, MD of Nandini steel, a mid-sized steel products manufacturer in Mumbai, says, “It is certainly good news for the steel industry, particularly for the small and medium units who have suffered huge financial losses over the past few months.”
However, the non-ferrous segment is not going to witness a significant increase in sales volume during the quarter. In this segment, the prices of most base metals, excluding zinc, are very much lower than the year-ago levels. Anirban Guha |
