Comments
Steel prices of hot rolled coils (HRCs) and rebars, which include construction steel, are witnessing a 2 to 3 per cent increase, in the range of ₹1,500-2,500 per tonne on the back of a higher demand in Europe, supply concerns from China and the rise in prices of Australian coking coal. More than two price hikes have been effected since March.
Further price hikes have not been ruled out either, and steel companies indicate they could renegotiate contracts in the coming days.
Market sources say the hikes have come into effect from March 23; although officials at Indian steel-majors say hikes are expected April 1 onwards only. State-owned SAIL has reportedly hiked prices by ₹1,500 per tonne for HRC and cold rolled coil offerings, say sources. Meanwhile, others such as Jindal Steel and Power Ltd (JSPL) and JSW is likely to effect similar hikes April 1 onwards.
The effective price of construction steel is around ₹74,000–75,000 per tonne (GST not included), while HRC is around ₹80,000 per tonne. On the other hand, steel plate prices are hovering at around ₹82,000–84,000 per tonne.
Global factors
VR Sharma, MD, JSPL, said the hikes have come primarily because of global factors. Rise in imported coking coal costs and increase in ferro-alloy costs – key raw materials used in steel – have had their impact in upping the price.
“We are supplying steel to the MSMEs and for existing contracts at the older price. Once the contracts expire, we will sit with the larger customers for price revisions and renegotiations in April,” he told BusinessLine.
JSW could not be reached for comments.
Supply Constriant
Russia’s invasion of Ukraine have severely hit supplies in the European market. Both Russia and Ukraine were major suppliers, with close to 3-4 million tonnes of steel supplies coming in per month from each of these countries. With the war, there is now a shortage of “at least 4-5 million tonnes per month”; which is being met through Indian and Chinese imports.
Spot prices of steel in Europe are higher by nearly ₹15,000 per tonne ($2,000 per tonne) as compared to Indian prices, making the market more lucrative. On the other hand, there is an impending lockdown in Tangshan in China – known as the steel city. This has led to further volatility on steel prices.
“Even if the war was to stop today, we do not see a situation where high prices of steel would come down in six to eight months. For one, Ukraine would look to rebuild itself and there is high chances of it becoming a net importer of steel; rather than being an exporter, at least for a period of time,” Sharma explained.
Input cost rise
The benchmark Australian coal is hovering at $630 per tonne (slightly down from $700 per tonne around middle of March); but still higher than the $550 per tonne levels in February.
Sources say there continues to be a shortage in Australian coking coal supply because of geo-political tensions (Russia being another major supplier) and other local factors.
Ferro nickel alloy prices, too, have moved up, say sources.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.