Indian steel prices dropped 2-4 per cent month-on-month in May following softened global cues, stressed demand due to increasing imports and slower than expected export offers from key markets like UAE and Vietnam.

This is the first major drop in domestic prices since January when mills here initiated a price rise buoyed by better export offers. Price rise was 10 per cent-odd January – April period.

For May first week deliveries, the price of benchmark hot rolled coils (HRCs) in India stood at ₹59,000 per tonne, down 2 per cent-odd over last month; while rebar prices took a 2.5 per cent drop, to ₹58,700 per tonne. The price in early-April was ₹59,800 per tonne for HRCs while for rebars it was ₹60,200 per tonne.

Export prices (or offers for overseas orders) dropped 4 per cent to $684 per tonne; from $711 per tonne, a month ago.

Slowdown in Indian markets

Import worries have re-surfaced, trade sources told businessline.

A SteelMint report stated that Indian traders concluded deals at around $700 per tonne levels (for flat steel offers) in April, and negotiations are currently underway for buying at $665 per tonne. Both prices are substantially lower than the previous overseas price and current domestic market price.

The anticipated revival in projects segment demand has not happened too for long steel products as stocks remain on the higher side and there’s cautious buying.

Trade sources say steel-making raw materials have softened considerably. NMDC - India’s largest iron ore merchant miner - reduced iron ore prices, while coking coal prices (of the premium Australian grade) dropped $25 week-on-week to $247 per tonne.

Volatility in April

Incidentally, steel price remained volatile throughout April over concerns of a production cut in China, the world’s largest steel producer and continued energy concerns in Europe; apart from slow overseas buying.

For instance, mid-April HRC prices in India saw a slight uptick of less than one per cent over March-end prices settling at around ₹60,000 per tonne (₹200 per tonne up) before falling over the next two weeks by ₹200 per tonne, to settle at ₹59,800 per tonne.

In the case of rebar, the drop was by ₹600 per tonne to ₹59,600 per tonne around second-week of April and slid further by another ₹300 per tonne to settle at ₹59,300 per tonne in the fifth week of April.

Prices hikes by Indian mills were also reversed since demand remained volatile.