Indian steel mills have rolled over domestic prices (kept them unchanged) in November even as demand continues to be on the lower side on account of festival season. In effect, domestic steel prices for the benchmark HRC (hot rolled coils) will be around ₹57,000-58,000 per tonne; while that of cold rolled coils (CRC) will be around ₹65,000 per tonne (for early November deliveries), sources told businessline.
For the export market, Indian mills continue to find the going tough because of slowdown of orders in key markets, even at $570/tonne prices. Exports remain depressed because of global recessionary pressures and increased price of Indian offerings compared with the competition.
Prices under pressure
Trade-level prices are under pressure, too.
The HRC price dipped by ₹200/tonne to ₹56,000-56,500. Cold rolled coils witnessed a steeper fall at ₹1,700 per tonne w-o-w and was trading at ₹63,000-64,000, according to SteelMint. Prices of galvanised pipes (GP) remained flat at ₹68,000 per tonne. Steelmint’s India Steel Composite Index dropped to a 12-week low for the week ending November 4, as it lost 1.5 per cent. The longs index edged down 0.83 per cent to end at 149.40 (150.70) points, flats slid by 1.45 per cent to 149.70 (151.90) points.
In October, some of the mills had to roll back announced price hikes. “Some sluggishness in demand continues in November, extending by over a month. In October, it was the festival season and extended monsoons that slowed the buying,” a steel mill official said.
India’s crude steel production for the April-Oct period saw a 6 per cent rise year-on-year to 71.29 million tonnes (mt). Crude steel production by PSUs decreased 5 per cent; while production by private players increased 8 per cent, for the period under review, data from the Ministry of Steel show.
H2 outlook
With the end of monsoon, steel prices are expected to pick up from mid November, driving margin improvement, said TV Narendran, MD & CEO, Tata Steel, during an analyst call on Tuesday.
A reduction in coking coal prices in Q3 should also help margins. However, Asian HRC prices have been correcting due to the weak Chinese economy, which could restrict the steel price upswing in the domestic market in H2 FY23. Realisation is expected to be lower by ₹800 per tonne in Q3, due to low-priced auto contracts finalised during H1.
The company management added that customers have started restocking, as domestic steel prices have begun to stabilise. This coupled with rising infrastructure activity would continue to drive steel demand in India.
Mills predict improvement in demand on the back of infrastructure projects coming back on track, and orders resuming specially with the fall in price. Some of the north Indian markets continue to be jittery because of a construction ban (except roads and highway project) because of a spike in air pollution in Delhi-NCR.