Steel prices to go up by Rs1,000 a tonne in New Year
26 Dec 2019
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Steel prices in the country are set to go up by up to Rs1,000 a tonne in what is seen as a demand-driven price spike amidst growing demand for the metal at home and abroad. This is the third consecutive price hike since January this year.
Despite the prices going up in last two months, demand has been holding strong in both automobile and infrastructure sectors on restocking by dealers. Steel companies have now demanded a Rs700-1,000 hike in the price of hot-rolled steel from January.
Steel manufacturers in India had, in November, hiked prices by Rs500-750 a tonne and followed this with another rise of Rs750-1,000 this month.
Steel prices were falling consistently since April and touched a low of Rs32,500 a tonne in September from the peak of Rs45,000 a tonne late last year.
Steel prices have been firming up in international markets as well. Globally, steel prices have gone up by $60 to $70 a tonne to $4,200-4,900 a tonne and this is expected to have an impact on Indian steel prices.
The rise in steel prices will directly add to the companies margin as the benefit of fall in raw material prices will kick-in. Coking coal prices have fallen by $60 a tonne to $130 while iron prices dropped to $90 a tonne from $120 a tonne.
With the improvement in demand and prices going up, steel companies profit may be better in the March quarter than in third quarter of this fiscal, said an analyst.
With domestic steel demand weak for most part of this fiscal, steel manufacturers have been relying on exports. In the first eight months of this fiscal India was net steel exporter. The country’s net steel imports grew by 5.3 per cent while exports were up 33 per cent as the steel prices in the domestic markets were trading at a discount of $16 a tonne to international prices during this period.
