Though the minimum import price has been implemented from February 5, 2016, some analysts ISMW spoke to feel its full impact is likely to be visible only beyond April and that too for about three-and-a-half months.
An analyst said that till April, the market will be well supplied with imported material on which the MIP does not apply since these deals had been struck previous to this policy announcement.
“Thus, the full impact of the MIP is likely to be visible only beyond April, for about three-and-a-half months.”
Furthermore, another said that some improvement in revenues and margins are already factored into the estimates of the steel companies. So a further upgrade in revenues will be possible if steel players can increase prices substantially beyond `1,500- 2000 per ton.
They don’t see any significant improvement in the profitability of steel companies any time soon and therefore, “unless there is meaningful cash generation from the business, the present situation will continue and for that we understand the underlying demand has to improve substantially,” said an analyst.