The Hindu Business Line : Steel cos may see higher sales realisation in Q4

New Delhi, April 4 Steel manufacturers could be expected to report higher profits for the fourth quarter of fiscal 2007-08 and are also likely to report anywhere between 20-25 per cent increase in net revenues from sales.

However, this increase in revenues is not necessarily an outcome of higher volumes but essentially a function of prices.

An analysis of the official steel price figures available with the Joint Plant Committee (JPC) of the steel industry suggests that the net sales realisation of the steel companies could even go up by around 30 per cent in the fourth quarter compared to the third quarter.

Steel industry officials admitted that there had been a substantial surge in sales turnover during the fourth quarter but pointed out that profits may not be as encouraging as sales realisations.

“There had been sudden increase in coal prices in the beginning of February and iron ore prices have progressively gone up as a result of which there will not be an equivalent increase in net profits,” industry officials said.

In Delhi, the city which does not have any major steel plant within a range of around 700 km (the nearest primary producers are in Raipur), the selling price of basic 2mm hot rolled coil has gone up from Rs 36,100 per tonne on January 1 to Rs 48,900 per tonne on April 1, an increase of 35.45 per cent. Two mm HR coil is a product for which the demand is highest among industrial customers.

This price is inclusive of excise and sales tax/VAT. The JPC collects price data from the producers as well as from trade sources.

Similarly, in Kolkata, 2mm HR coil price has shot up from Rs 36,675 per tonne on January 1 to Rs 46,375 per tonne on April 1, In Mumbai, it has moved up from Rs 34,500 per tonne to Rs 43,500 per tonne and in Chennai the price has shot up from Rs 36,750 per tonne to Rs 46,000 per tonne during the quarter.

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