ICRA also said it expects domestic steel prices to recover in the coming months because of a large differential between MIP and current import offers.
    
The agency added it 'expects MIP to provide a temporary relief to domestic steel industry, while the extent of cheaper steel imports is likely to reduce, given that MIP covers a wide spectrum of steel products'.
    
However, the magnitude of price increase by steel players is not expected to be as sharp as the price differential on account of an adverse demand-supply equation that the industry is likely to face in the short to medium term, it said.

In a recent report, ICRA added, "Also, large integrated players having stronger financial profile are likely to take this as an opportunity to moderately increase prices and grab a greater market share from their weaker competitors."
    
ICRA's Senior VP and Co-Head Corporate Sector Jayanta Roy said that India's steel consumption growth improved to 4.4 percent during April-December 2015 from 3.1 percent in 2014-15 driven by automobile and construction sectors.
    
However, the growth pattern remains uneven, which puts a question mark over the sustainability of demand improvement, he added.

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