Economy

Amid demand revival, steel cos hike prices by ₹2,500/tonne

Suresh P Iyengar Mumbai | Updated on September 14, 2020 Published on September 14, 2020

Steel demand has been robust in the last couple of months   -  P_V_SIVAKUMAR

NMDC rises iron prices by ₹300 a tonne

Steel companies have hiked prices for the third month in a row on the back of demand revival and firm price trends in the overseas market.

Hot-rolled coil prices have been marked up by ₹2,500 a tonne in September to ₹40,500, while that of long products used in real-estate projects were increased by ₹3,000-39,300. Domestic HRC prices have moved up substantially from ₹36,000 tonne in July. Despite the recent hikes, HRC steel prices are still below the pre-Covid level of ₹42,000 a tonne even as domestic iron ore has been on the rising trend.

HRC prices in China continued to increase to $508 a tonne on the back of good demand. Exports from China are unlikely to jump as their realisations from domestic sales are much higher than selling abroad.

State-owned NMDC, the largest iron ore producer, increased lump (65.5 Fe) prices by ₹300 a tonne to a 22-month high of ₹3,250, while that of fines (64 per cent iron content) were also marked up by ₹2,950 a tonne.

The hike has taken the lump and fines prices to their highest levels since December and November 2018, respectively.

With the rising steel demand, NMDC’s iron ore sales in August increased by 20 per cent to 1.79 million tonne and output by 15 per cent to 1.62 mt.

Coal prices dip

Seaborne coking coal prices fell to $106 a tonne by August-end from $163 in March due to sharp dip in imports by Japan, European Union, South Korea and India due to the pandemic.

India’s coking coal imports plunged 30 per cent year-on-year and 2 per cent month-on-month in August as most steel-makers are exhausting their inventories before buying afresh. On the other hand, coking coal imports from China increased 30 per cent in June to 6.26 mt. The Chinese government is likely to promote the use of domestic coal while tightening import norms.

Domestic steel production improved 28 per cent in July to 6.65 million tonne against 5.19 mt in June, as domestic players ramped up with the easing of lockdown restrictions; on year-on-year basis, it is up 2 per cent, said India Ratings and Research.

JSW Steel said its capacity utilisation has touched 88 per cent in August from 83 per cent in July, while Tata Steel claimed that its utilisation level has hit 100 per cent.

 

 

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Published on September 14, 2020
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