Steel companies have hiked prices by ₹2,500 to ₹2,700 a tonne of both flat and long products for December on the back of rising iron ore prices and strong demand for steel.

With the recent hike, the hot rolled coil prices ex-Mumbai have hit a record high of ₹47,000 a tonne, in line with a firm price trend in the international market.

Interestingly, despite the hike this month, steel prices are still at a 5 per cent discount to the landed cost of imports. This leaves more room for steel companies to raise prices further with increasing demand from automobile and white goods companies.

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The demand from real estate sector has also started looking up following the government announcing a special package for real estate companies.

Demand for steel has been holding strong ever since the government announced stimulus package and performance-linked incentive of ₹2-lakh crore across 10 sectors spread over five years to create an ecosystem that will add ₹20-lakh crore worth of manufacturing facilities and three crore well-paying jobs.

The government is also identifying various other sectors which need policy intervention, such as de-regulation, hand-holding and other forms of support and incentives, especially the areas where India has potential, capability and competitive advantage to manufacture for the world.

Iron ore price rise

State-run mineral producer NMDC hiked the prices of iron ore twice last month on buoyant demand. In the first round of hikes on November 4, the price of iron lump was hiked to ₹3,600 a tonne from ₹3,450 a tonne logged in October, while that of fines was increased to ₹3,310 a tonne from ₹3,160.

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Consequently, for the second time on November 17, the price of lump ore was increased by about ₹400 a tonne and that of fines by ₹300 a tonne due to supply constraints. It is expected to go up further this month.

Meanwhile, import prices of coking coal plunged to a 52-month low by mid-November, declining 27 per cent since early October 2020 in anticipation of oversupply in the global market in the medium term with the reported verbal notice of a ban on Australian coal imports by China.