Monsoon Leads To Fall In Iron And Steel Prices

With the onset of the monsoons in Mumbai, the off-season in the local iron and steel market has led to a decline in iron and steel prices.

Iron and steel prices have suffered a setback by about Rs 300 to Rs 500 a tonne following sluggish demand, heavy inflows of the goods from the upcountry centres and severe money crisis. The mild steel (MS) rounds of 6 mm prices fell to Rs 15,100 a tonne from Rs 15,600 a tonne quoted about a week 10 days back.

Similarly, prices of CTD bars of 8 mm have gone down to Rs 12,900 from Rs 13,300 a tonne, 10 mm to Rs 12,600 from Rs 12,900 a tonne, 12 to 25 mm to Rs 12,300 from Rs 12,700 and prices of m.s. angles of various sizes have dropped to Rs. 15,300 from Rs 15,600 a tonne.

 

The local market has to face fierce price wars against the goods coming from the upcountry centres viz. Bhavnagar in Gujarat and Raipur in Madhya Pradesh. It is to be noted that the materials coming from these centres are being sold cheaper by Rs. 500/600 a tonne in the local market. Sources claim that if all taxes (local taxes and central excise duties) are paid correctly, these materials cannot be sold cheaper in the Mumbai market. About 10 to 12 trucks carrying materials from upcountry centres enter the Mumbai market every day. The local iron and steel market is facing stringent monetary conditions. Cases of extension of such monetary credit in the local market are quite common. Besides, the market is also facing sluggish demand from builders, suppliers and government projects which are at halt.

Though the construction industry is fighting against recession, the commencement of monsoon in the city has fuelled the fire.

Market sources add that the iron and steel manufacturers should send their goods on the consignment basis to the market, because if it is done so, it attracts only 4 per cent tax i.e. central sales tax. But if it is not sent on consignment, it attracts about 8 per cent sales tax.