Major steel makers found their scrips soaring today as they prepare for a Rs 400-700 per tonne rise in prices of steel at an industry meet today.

Essar Steel (up 6.15% to Rs 14.85), Jindal Vijaynagar (up 5.20% to Rs 9.30), Steel Authority of India (up 4.09% to Rs 17.55), Jindal Strips (up 1.94% to Rs 200), Tisco (up 1.95% to Rs 170), Uttam Steel (up 4.17% to Rs 12.25), Bhusan Steel (up 3.90% to Rs 42.65), Ispat Industries (up 3.80% to Rs 9.55) and Kalyani Steel (up 1.90% to Rs 32.20), all strode up on impressive volumes.

Steel players will now be raising prices after a three-month hiatus. Prices are being hiked on expectations that demand for steel will increase in the coming days, particularly from China as it embarks on infrastructure building ahead of the Olympic Games in 2008. Earlier, due to the SARS alert construction activities in that country were halted.

However, Beijing has now been taken off the Sars travel advisory and also declared Sars-free by WHO .

Recently, China announced higher annual quotas for steel import. The world's largest steel importer has decided to buy 9.2 million tonnes of steel from Indian companies over a one-year period.

On the domestic front, too, steel prices are expected to stabilise at current levels, higher than that of last year. The construction and automobile sectors, it is expected, will provide the limit to any downside in demand for steel. The capital goods industry is also expected to register strong demand.

At the same time, a greater thrust on infrastructure projects, including national highway and roadway projects, will only serve to enhance demand for steel.

On the back of strong demand for steel, which was also coupled by a rise in prices, steel companies have managed turnarounds in FY 2002-03.

Meanwhile, last week (between 23 and 27 June 2003), the market capitalisation of the overall steel sector, comprising Steel Large and Steel Medium/Small companies, rose by 8.49% to Rs 19,269.3 crore. In the last one month (27 May and 27 June 2003), the m-cap of the Steel sector rose by 33.5% from Rs 14,438.17 crore.