Steel companies might gain or loss from the decline of input costs

NEW DELHI (Scrap Monster): According to the analysts, the second quarter earnings of the steel companies, will increase, as the cost of the raw material is sliding low, this also lead to the expansion of the margins, even after, the continuous volume growth, in a weak quarter.

Centrum Broking, in a report stated that, in Steel Authority of India and Tata Steel the demand the volume of steel expected to be flat with no considerable change, due to the increasing import pressure from China and also the domestic demand. But in the case of Ebtida has improved, reducing its coking coal price.

The price of the most important raw materials in the industry, coking coal, as well as iron ore, has been running low, since the September quarter. The price of iron ore fell 32 percent to 91 dollars per tonne, when compared to the last year’s pricing. The price of coking coal fell to 119 dollars per tonne, from 145 dollars per tonne, which was the last year’s pricing.

IIFL stated that, the global price of steel has been weakening as the result of a decline in the price of the products raw materials. The global price of iron ore has declined due to the decrease in demand from the Chinese industry as well as the oversupply created by the Australian miners.