However, firms which produce flat steel products—mainly used by the automobile and consumer durables industry— may consider hiking rates of some segments to stay afloat
The July-September period will see erosion of profitability of steel companies as the gloomy demand scenario would prevent them from hiking rates amid high input cost pressure, a government official said today, reports PTI.
"The current quarter would be the weakest link in the financial year 2010.
Margins, profitability of steel companies will take a hit amid high input cost pressure, sluggish demand scenario," Joint Plant Committee Chief Economist A S Firoz told PTI.
The Joint Plant Committee is a government agency which collates data on the Indian iron and steel industry, conduct techno-economic studies, among others.
Steel firms have seen prices coming down by up to Rs 6,000 a tonne to around Rs 27,000-33,000 a tonne in past few months as construction work slowed down ahead of monsoon.
"During monsoon now, steel demand and prices, especially of long steel products, are expected to fall again in the current quarter," Firoz said. Long steel products are mainly consumed by construction and infrastructure companies.
He said, however, firms which produce flat steel products -- mainly used by automobile and consumer durables industry -- may consider hiking rates of some segments to stay afloat.
"Steel makers can increase prices of products, which have demand. Considering the demand, they can always adjust prices. But, global prices at present are ruling low, there have been cheap imports in last few months," he added.
Leading steel producers like Essar Steel and JSW Steel are looking at increasing price in some segments in the current month.
Prices of raw material -- iron ore and coking coal -- are at present ruling around 50-100 per cent high. Spot iron ore prices are ruling at around $115-120 a tonne and coking coal prices at around $200 a tonne level.
"The recent correction in spot prices of these raw material have not yet been reflected under the supply contract, so the input cost pressure is still there," Firoz added.
Mumbai is at a standstill despite the ruling party saying that it would ensure that it was business as usual. For those who believed the government and made their way to work without a dabba, half the day was a long search for food.
It is called the "City that never sleeps", yet Mumbai was caught dozing off during the day today, after the bellicose call by our netas for a 'Bharat Bandh'.
Yesterday, Maharashtra chief minister Ashok Chavan said that there wasn't going to be any bandh-like situation. Hearing that, I ventured out to my work place (after all, I work for a media organisation) at Shivaji Park in Dadar, the heart of Mumbai's right-wing Shiv Sena and its breakaway faction, the Maharashtra Navnirman Sena (MNS). However, once I stepped outside from my home, there wasn't a sign of the promises Mr Chavan had made.
This is the new Mumbai for you. A few years ago, Mumbaikars took pride in defying bandh calls and even the fury of nature to make their way to office. Commercial establishments and hawkers strived to remain open; but not anymore. Mumbai no longer needs to be forcibly shut down by rampaging mobs. Even on my way to work, it was evident that neither malls and shop-owners, nor the hawkers on the street were taking any chances. They had simply taken the day off. Even the legendry dabbawallahs were off today.
Around noon, it was clear that we would have to go out and hunt for food in the concrete jungle. The streets were deserted as autos, taxis and fleet cabs decided to stay off the roads. Shops and restaurants were closed. Even the road-side hawkers who supply Mumbai's countless migrants-from labour to executives-with every imaginable variety of street food were missing. Yet, you did see the occasional motorcyclist or car passing by. The police seemed to be everywhere, patiently waiting for any signs of protest or trouble. Only the mobile chaiwalas on their cycles, selling hot tea and peddling cigarettes, still dared to roam the streets.
Mumbai is a melting pot of culture and ethnicities, and this is reflected in the incredible range of its street foods and restaurants. You can go eat a tandoori from a Punjabi dhabba or grab Maharashtra's famous vada pav. You could have some road side idlis and vada sambar, or even have some delicious pani puri. Such has been Mumbai's free enterprise.
As I set out, the hunger pangs were gnawing. There were others who didn't even have a tiffin with them, so I as pretty sure it was in their head too. As mentioned earlier not a single store was open and the vada pav or pani puri stalls were also shut. We needed FOOD!
Our first stop was at our corner vada pav wallah; he wasn't there. The stall was nicely covered with a cloth to protect it from the rain. I then made my way to Kirti College to have its famous vada pav; however, I was halted by a fellow hunter in search for food who informed me that "Kirti is also closed". By now it was beginning to dawn on me that the vada pav walah lobby had to stay shut since it owed its allegiance to Shiv Sena which controls Mumbai's municipal corporation-in other words, their legal hawking licences or hafta payments. In a flash, I recalled that all the junka bhakar and vada pav stalls mushroomed in the Sena's regime. It explained the loyalty factor as well.
So I was still without food. Right next to our office, there is an Udupi restaurant, at which I am a regular. Although its shutters were closed, I decided to try the back door and test my persuasion skills. Moneylife employees have given this place good business in the past, but it didn't relent. Once we entered the kitchen, the entire eatery was dark and you could see the workers squatting inside. One of them recognised me and said, "Saab, kya hua." I tried to look famished. Even if he gave us sandwiches, we would have been grateful. However, even in the dark I realised the answer was going to be 'no'. there were only there to safeguard the restaurant while their own dal-chawal was going to be brought from outside.
Disappointment loomed on our faces and we realised our search would be longer. We saw some youngsters trying to persuade the vada pav walah to fry a batch, but he said he wouldn't because he had no pav (buns). Finally someone told us of a place where we could get some 'tiffins'. He even took me there (towards Mahim) on his outdated Bajaj scooty, but again no luck; the owner said she only had food for two and we go to another place called the 'Canteen'. By now, I had certainly lost any hope of getting any food for my colleagues and me.
Having no choice, I went ahead. The biker was a nice guy who only spoke Marathi. He said, "You should get burji pav." I was uncertain. So, I asked him where the canteen was. He said it was at Sena Bhavan. Now, I was completely certain that we wouldn't get any food. Sena Bhavan has been the Saniks headquarters for ages. The likely thought of getting food on a bandh day like this was ludicrous. But the canteen was open. The canteen was nearly 70 steps away from the Sena headquarters and there was this South Indian guy making hot kheema and bhurji pav. His shanty was covered by a tree but it was still visible. I wasn't the only one there; there were others too who were in search of food, even some cops. So I quickly told him to pack seven plates of bhurji pav, paid for it and went back to the office with the deliciously tikka stuff.
The irony was that while most shops were closed out of fear, this South Indian hawker, whose shanty was a stone's throw away from Sena Bhavan, dared to remain open. Thank you, bhurji walah.
Unless 17,700 on the upside or 17,300 on the downside is breached, the market is expected to remain listless
The market witnessed subdued activity today on account of the 'Bharat Bandh' called by the opposition parties across the country to protest the recent fuel price hike by the government. Volatility was high but the trading volume was very low. The market traded in a narrow band and ended the session on a flat note. The Sensex ended at 17,473, down 19 points (0.11%) and the Nifty was at 5,236, lower by 1.2 points (0.02%).
The top gainers on the Sensex were Mahindra & Mahindra (M&M) (up 1.33%), Wipro (up 0.89%), Bharti Airtel and HDFC (up 0.81% each) and Infosys (up 0.51%). The top Sensex losers were Reliance Communications (down 2.88 %,), Hindalco Industries (down 1.73%), ONGC (down 1.45%), BHEL (down 1.27%) and Hindustan Unilever (down 1.13%).
In the sectoral space on the BSE, healthcare (up 0.53%), IT (up 0.39%) and bankex (up 0.32%) were the top performers, whereas oil & gas (down 0.79%), metals (down 0.40%) and PSU (down 0.37%) were the laggards.
Asian equity indices finished mixed on Monday. Investors remained cautious on worries over the slowdown in China after disappointing economic data last week.
Nikkei 225 gained 63 points (0.69%) to 9,267. Jakarta Composite advanced 6 points (0.20%) to 2,877, Seoul Composite was up 4 points (0.21%) to 1,675 and Taiwan Weighted gained 109 points (1.49%) to 7,439.96.
Among the markets that ended lower, Shanghai Composite was down 19 points (0.80%) to 2,364, Hang Seng was down 63 points (0.32%) to 19,842 and KLSE Composite was down 8 points (0.61%) to 1,299. The South Korean market remained closed today.
The US markets continued their slide on Friday due to disappointing jobs data. US employment in June fell for the first time this year. Overall, 125,000 workers lost their jobs last month, more than the drop of 110,000 that analysts had predicted. Besides, the government also reported that factory orders fell in May for the first time in nine months. The 1.4% drop was the biggest since March 2009. This news coupled with the jobs data unnerved traders, taking the markets down.
The Dow lost 46.05 points (0.47%) to 9,686.48, its lowest close since 5 October 2009. The S&P 500 index fell by 4.79 points (0.46%) to 1,022.58 while the Nasdaq was down by 9.57 points (0.47%) to 2,091.79.
The US market remained closed today for the Independence Day holiday.
Back home, normal life was disrupted in several parts of the country during the 'Bharat Bandh' called by a combined opposition to protest the fuel price hike. The greatest impact was felt in National Democratic Alliance (NDA) and Left-ruled states and in Maharashtra.
Sporadic incidents of violence, in which buses and trains were targeted and clashes with police who baton-charged the protestors, were reported during the day-long nation-wide strike.
The country's new chief statistician TCA Anant today said hiking fuel prices was a better option than keeping them artificially low and widening the fiscal deficit.
He also hinted that the government's move to hike fuel prices should have come sooner, but acknowledged that it was difficult to time these kinds of decisions because of 'multiple pressures' in a democracy.
Inflation will ease into a comfortable zone by December, Montek Singh Ahluwalia, deputy chairman of the Planning Commission, said on Monday.
The Reserve Bank of India (RBI) on Friday raised interest rates earlier than expected, ahead of its 27th July policy review, days after the government freed fuel prices. Analysts expect another 25 basis points (bps) hike on 27th July, on concerns over inflation hovering above 10%. The central bank projects headline inflation, which hit 10.16% in May, to fall to 5.5% at end-March.
Foreign institutional investors were net sellers in the equities market on Friday, offloading stocks worth Rs305 crore. Domestic institutional investors were net buyers, purchasing stocks worth Rs26 crore.
The boards of directors of Anil Dhirubhai Ambani group companies Reliance Power (up 3.5%) and Reliance Natural Resources (RNRL) on Sunday approved the merger of the two companies. The boards approved a 4:1 share swap ratio.
Shareholders of RNRL will get one share of Reliance Power for every four shares held by them. The exchange ratio is based on a valuation by KPMG. The deal comes within days of RNRL signing a revised gas supply deal with RIL for power projects, which are under the charge of Reliance Power.
Eicher Motors gained 3% after VE Commercial Vehicles, a joint venture between Eicher and Sweden's Volvo, said it sold 2,966 trucks and buses in June, up 43% year-on-year. Exports during the month were slightly lower at 220 units.