Steel shares extend rally

Tata Steel surged 7.26% to Rs 762 and Steel Authority of India advanced 6.64% to Rs 200 extend Tuesday's gains on fresh buying

Tata Steel saw volumes of 8.92 lakh shares while Steel Authority of India witnessed volumes of 19.02 lakh shares on BSE.

Steel shares had gained on Tuesday, 12 February 2008 after reports that steel companies will not roll back prices despite Government intervention. The representatives of the steel ministry had met with steel producers yesterday, 12 February 2008, to seek justification of price hike from the producers. It may be recalled that steel producers had hiked prices by Rs 500 to Rs 1,500 per tonne across various products in early February 2008 following increase in raw material prices.

Meanwhile, the Government will be holding a meeting with major steel producers in the next two to three days again to discuss the issue of increase in prices. The Government had termed the price hike by steel companies as unreasonable.

A rollback if it happens would be the second in this financial year. In March 2007, at the behest of the government, the industry went for a partial rollback to rein in inflation.

Meanwhile, the producers may also demand immediate allocation of captive iron ore blocks to integrated steel producers, reduction of railway freight and removal of congestion charges by railways for the transportation of iron ore to ports.

Tata Steel's net profit rose 0.5% to Rs 1068.58 crore on 11.3% growth in net sales to Rs 4973.92 crore in Q3 December 2007 over Q3 December 2006

Steel Authority of India posted 31.50% rise in net profit to Rs 1934.66 crore on 12.41% rise in total income to Rs 9,847.64 crore crore in Q3 December 2007 over Q3 December 2006