Steel prices will likely remain under pressure during the first three month of current financial year, unless prices of key raw material iron ore drops, Tata Steel Ltd MD Hemant Nerurkar said.

While slowdown in the economy brought demand for steel in automobile & construction sector, ban on extracting iron ore in Karnataka led to scarcity of the raw material, putting steel makers under intensified pricing pressure.

According to Nerurkar, the steel sector can perform well only in case demand from automobile & infrastructure sector improves. He suggested that investments should be made at the ground level in various infrastructure projects to make things improve.

As per a fresh report by Nomura Research, domestic steel prices are presently trading at a discount of 4 per cent to 5 per cent to import parity. It is considerably down from the 8 per cent to 10 per cent in March.

Steel prices in the global market have also slipped by 5 per cent to 6 per cent in previous month. Nomura doesn't expect any drastic improvement in prices of the metal in near future.

Tata Steel Ltd also announced the merger of two of its wholly-owned subsidiaries, viz. Tata Metaliks Ltd (TML) and Tata Metaliks Kubota Pipes Ltd (TMKPL), with self.  The steel giant said that the merger had been approved by its Committee of Directors as well as the Board of Directors of both TML and TMKPL.