Improved demand scenario for steel to continue: CMIE

The Centre for Monitoring Indian Economy (CMIE) today said that the demand for steel has risen and the trend will continue in the current fiscal.     

"The ongoing government funded infrastructure projects during the peak construction season, a slight revival in the automobile industry and a sharp 40-45% correction in steel prices from the peak level of July 2008 spurred the demand for the commodity," the monitoring body said in its monthly review of the Indian economy.       

According to the CMIE report, the revival in demand would also start reflecting in the prices, which were up 2-3% in March after sharply falling in the previous four months.       

"While the improved demand scenario would continue in 2009-10, this would not translate into a major recovery in steel prices," the report  said.      

Average prices of hot rolled coils rose by 1.8% in March. Prices of cold rolled coils and galvanised sheets rose by around 2% each.      

"With a sharp reduction in input prices expected in the renewed contracts of domestic companies and global steel prices remaining subdued, we expect domestic steel prices to remain weak in 2009-10," the report said.