Steel prices to go up by ₹1,000 a tonne in Jan

Suresh P Iyengar Mumbai | Updated on December 25, 2019 Published on December 25, 2019

The domestic HRC prices have fallen 16 per cent in this fiscal following lacklustre demand from the key end-user industries. File Photo   -  Reuters

Globally, steel prices have gone up by $60 to $70

Steel prices are set to go up for the third consecutive month in January following revival in domestic demand and firm price trend globally. Just like in many other metals, steel companies in India take price signal from global markets.

Despite the prices going up in last two months, demand has been holding strong in both automobile and infrastructure sectors on restocking by dealers. Following this, steel companies have intimated that Hot-rolled coil prices will be increased to Rs 700-1,000 a tonne in January, said a stockist.

In November, steel manufacturers hiked prices for the first time in this fiscal by ₹500-₹750 a tonne and followed this with another rise of ₹750-1,000 this month.

Steel prices was falling consistently since April and touched a low of Rs 32,500 a tonne in September from the peak of Rs 45,000 a tonne late last year.

Globally, steel prices have gone up by $60 to $70 (₹4,200-₹4,900) and this is expected to have a rub of effect on Indian steel prices. Steel companies have hiked prices by ₹1,000-₹2,000 a tonne.

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.

As the steel demand remained weak in most part of this fiscal, steel companies 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.

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Published on December 25, 2019
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