Fall in rupee may boost steel exports from the country: Platts

Depreciating rupee is likely to boost export prospects for the domestic steel firms along with possible reduction in steel imports to the country, an analyst with Platts McGraw Hill Financial said.

"A falling rupee will boost prospects of steel exports from the country. Domestic steel firms with captive iron ore mines will be benefitted from the fall in the currency," Editorial Director (China) of Platts McGraw Hill Financial, Sebastian Lewis told reporters here.

Platts is one of the global information service provider on energy and metals and a source of benchmark price assessments in the physical energy markets.

Lewis also said that the imports of steel might be reduced to the country with fall in the rupee.

Rupee has lost around 20% in the last few months on the back of possible tapering of US bond buying programme coupled with weak macrofundamentals like high current account and fiscal deficit.

On the issue of rise in raw material cost like coking coal and iron ore for the steel firms, the official said that depreciating rupee would push coking coal cost for the domestic manufacturers.

But, he added that iron ore price rise would not be much due to lesser amount of import of the commodity by the domestic steel firms.

On Chinese steel demand scenario, Lewis said after building up of inventory in China in the first quarter, destocking has happened in the second quarter on demand growth, especially from exports.

He, however, pointed out that there was overcapacity in the Chinese steel industry.