Steel prices in the domestic market have dropped by eight percent in the first half of the fiscal year, significantly impacting the operating profitability of primary steel producers.

Despite an increase in sales volume and reduced cost pressures from lower coking coal prices, the operating profit margin is expected to remain between 15-16 percent for the current financial year.

The combination of lower realizations and flat operating margins is likely to result in a 5-7 percent decrease in absolute EBITDA for primary steelmakers this fiscal year. This decline comes at a time when substantial growth capital expenditures are being undertaken by the industry.