Steel players to enjoy profitability in near term: ICRA

Steel players to enjoy profitability in near term: ICRA

03/06/2016 14:08

Rating agency ICRA has said that domestic steel players are likely to enjoy better profitability in the near term due to improved steel prices in the current year, supported by an imposition of minimum import price (MIP) by the government.

As per reports, post the operationalisation of MIP, domestic hot-rolled coil (HRC) prices have witnessed a sharp increase of about 25 percent from their lows reached in February 2016.

Further, industry players can see additional gains due to an increase in sales volumes as imports are likely to reduce in the current year.

The report further added that although MIP is scheduled to expire in the second quarter of the fiscal, currently buoyant international prices, along with the extension of safeguard duty ( SGD ) up to March 2018, will continue to help Indian steel producers.

Commenting on the issue, ICRA Senior VP and Co-Head, Corporate Sector Ratings Jayanta Roy told the media, “While the prospect of international prices declining again cannot be ruled out, given the still adverse demand- supply equation in the world, the final outcome of the anti- dumping investigations initiated by the Directorate General of Anti-Dumping and Allied Duties would be a key determinant of longer-term price trends in the domestic market.”

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