The third quarter up to December 2005 was a subdued quarter yet again for the steel sector. After having fallen almost 25 percent from its peak, global prices of steel stabilised except in the Asian region where it continued to remain weak. Steel prices remained sluggish in Q3 FY06 on account of supply pressure from global markets. Impact of large-scale production cut by European and Americans was negated by high growth in China production and resulted in further softening in steel prices in the global market. However, on account of shortage of raw material (primarily iron ore and coal) prices of these inputs remained firm and inflated the cost structure for non-integrated players further.
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