Steel companies hike prices by Rs 500-750 a tonne for the first time this fiscal

Suresh P. Iyengar Mumbai | Updated on November 14, 2019 Published on November 14, 2019

However, domestic prices are still at a discount to international prices

Steel manufacturers hiked prices for the first time in the last seven months in November, as the inventory at both the consumer and steel manufacturers’ end shrank after the recent pick-up in demand.

Most steel companies, including JSW Steel, have hiked prices of hot-rolled coil by Rs 500-Rs 750 a tonne to Rs 35,500, and TMT bars by Rs 750-Rs 1,000, depending on quality specifications.

Jayant Acharya, Director (sales and marketing), JSW Steel, said, globally, steel prices have gone up by $20-$30 a tonne due to a production shut-down by most steel companies, as their selling prices had fallen below production costs.

Inventory in China has also come down by 18 per cent or two million tonnes in last two months. Steel production in China is also expected to slow down with the winter setting in.

While the cost index had remained more or less similar to the 2017 levels, steel prices have fallen by over $100 a tonne to $430, from the level of $545 that prevailed two years back, he said.

Domestic prices at a discount to import prices

Despite the Rs 500-Rs 750 hike, domestically,HR coil is being sold at a discount to imports, he added.

In India, inventory at the dealer level dropped by 0.5 million tonnes in October, as steel demand increased by 3.9 per cent. Passenger vehicle sales in October increased to 2,85,000 from 2,23,000 in September; similarly, two-wheelers and commercial vehicles sales were up 6 per cent and 16 per cent month-on-month, while the year-on-year comparison still remains a concern.

Post-monsoon, construction activity has picked up with higher allocation for both state and Central government-funded projects.

On the packaging side, Acharya said the ban on single usage plastics has stoked demand for tin plates, where JSW Steel hiked capacity recently.

On steel imports, he said, globally, steel prices have fallen below the anti-dumping duty price of $489 a tonne and some shipments booked at higher levels were hitting Indian shores. It will not make business sense for the user-industry to import steel when domestic prices are trading at a discount to the import price.

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Published on November 14, 2019
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