Steel price reprieve for carmakers

The government's move to levy a 15 percent export duty on steel and lower them on ferro nickel, coking coal, and raw materials has led to sharp drop in prices. Amit Vijay M reports.

- Amit Vijay M

Steel prices are expected to fall by an estimated Rs 10,000 per tonne in the forthcoming weeks following the reduction in import duty on some key raw materials used in its manufacturing. A moderation in the steel prices and an expected reduction in the casting and pig iron prices is, therefore, likely to bump up margins of auto companies by 60 to 100 basis points, said analysts. Pushan Sharma, Director, Crisil Research said import duty cuts will enable auto companies to get some relief from the overall input price increase. He added that lower steel prices will lead to some comfort on the margin front for the industry, which is reeling under high-cost pressures.

Sharp fall in steel prices