The Hindu Business Line : Another round of finished steel price hike likely

IS another increase in finished steel prices round the corner? It seems to be so from the general uptrend in the seconds steel market and overall demand picking up from the downstream processing industries for it.

In general prices of various seconds products like steel trimmings, coil ends, defective hot rolled coils, etc have witnessed around 10 per cent increase in their auction prices during the past week.

Market sources feel that the sudden spurt in prices of seconds steel, auctioned mostly through the electronic platforms, could be an indication of another round of steel price hike in the near future.

As of now both long and flat steel products are auctioned electronically by a host of specialised Web sites operating in this field. They mostly sell the secondary steel from the steel manufacturers since prime steel is usually sold directly to the end users through long-term contracts. It is these auctions that have witnessed a sudden spurt in net realised prices over the last four to five days.

According to sources, prices of ingots moved up from around Rs 22,000 per tonne to Rs 23,000 per tonne between Monday and Friday. Similarly, prices of defective hot rolled coils/sheets increased from Rs 22,000 to Rs 23,000 while prices of coil ends went up by Rs 1,500 from Rs 22,000 on Monday to Rs 23,500 on Friday.

The prices of steel trimmings moved up from Rs 18,500 to Rs 20,000 per tonne. Similarly, prices of various grades of scrap went up by around Rs 1,500 across the board.

According to an official in one of the auctioning Web sites, it is mainly demand for seconds products used mainly by the downstream processors who are operating small and ancillary units that is pushing the price upwards. These are small units and find it easier to source their materials online.

These units are those like shutter manufacturers, various parts manufacturers for consumer goods like cycles, automobiles, coolers, etc. "In general there is increased activity and the trend seems to be strong and likely to continue for some time," the official said.