RupinderSra: STEEL: Indians To Make Syndicate & Buy Overseas

Frontline steel companies in India have decided to form a syndicate to acquire assets abroad and fight the competition posed by their Chinese counterparts. The syndication is likely to be formed under the state-run Steel Authority of India (SAIL). Bargaining power of Indian steel companies will improve. All major steel manufacturers are examining the idea.

Steel consumption is expected to increase to 150 million tons per annum in the next decade from 60 million tons now. Demand for raw material will increase and steel prices will go up. However, iron ore price is expected to fall thereby balancing out to some extent.

India steel companies have problems in getting coking coal. It is an important raw material. Domestic supply is only about 30 per cent and the rest is imported. By forming a syndicate like the Chinese, Indian steel makers will be able to get better price and have long term contracts. Coking coal price is hitting the sky.