MUMBAI: After revising steel prices upwards last month, steel firms are now offering discounts as customers are keeping off the market, say industry sources.
"Due to demand slowdown steel companies have started offering discounts as customers are unwilling to absorb the revised price announced in September," say sources in the industry.
They also say though there is no formal rollback of the price revision, discounts are offered to offset the revised prices.
In September, major steel companies had increased prices by Rs 1,200-1,500 per tonne on the back of rise in input cost due to sharp depreciation in rupee.
However, subdued steel demand from major user industries like auto, construction are now forcing them to offer discounts on revised price points.
When contacted, leading steel makers refused to come on record.
Steel demand during the first five months of the fiscal grew only 0.5 per cent due to the overall slowdown.
Analysts have pegged steel demand growth to be around 3 per cent in the current fiscal due to the low base effect and some pick-up in demand in the second half of the current financial year.
Referring to discounts, senior analyst (metals and mining) at Angel Broking Bhavesh Chavanopined that the broking firm had earlier indicated towards this possibility due to weak demand scenario.
Notably, many steel firms had to roll-back price rise earlier in the year due to similar demand situation.