Steel cos to invest Rs 89240 crore: Survey

Indian steel firms plan to invest Rs 89240 crore in coming months to expand capacity by 31 million tonnes to meet rising demand in a fast growing economy, a survey said on Monday. The survey by Associated Chambers of Commerce and Industry said price pressures could ease if two-third of the planned capacity expansion was carried out in the coming months. Companies like Tata Steel, Bhushan Steel and Vedanta Resources announced major expansion plans in recent months in eastern states, it said. "With steel prices increasing by more than 30 per cent in 2008, the industry announced capacity expansion plans of 31 million tonnes in the last quarter of 2007-08 in order to meet the fast growing demand." The government has persuaded steel firms not to raise prices for three months and imposed an export tax to increase local supplies and fight inflation that hit a 3-½ year high in late April. While steel production grew by 5.2 per cent to 55.26 million tonnes in 2007-08, consumption grew by 11.72 per cent to 51.80 million tonnes. More-than-expected growth in demand and rising raw material prices have been pushing steel prices up, ASSOCHAM said.