Steel companies are cheering the weakening of the Indian currency against the dollar as it would make export of steel products more competitive and discourage local consumers from resorting to import.
Local steel consumers may find imports costlier because of the depreciation in rupee and this may benefit Indian steel companies, reports indicate.
Since April 1, 2013, rupee over 5.7 percent against the dollar and some forex analysts feel it is expected to depreciate further to Rs 60 this year.
Steel companies may benefit from the depreciation in the short term, while in the long term it will have an adverse effect on steel companies which are implementing large projects based on imported equipment and those with foreign currency loans, analysts feel.
Companies like Jindal Steel & Power (JSPL) may explore exports markets aggressively owing to the decline in the Indian currency. Since the last quarter, JSPL decided to focus on exports in a big way.
Indian steel firms are estimated to have exported over 6.5 million tonne in 2012-13 because of a 10 percent slide in Indian prices since October last year.
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