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Steel companies are set to raise prices by ₹800-1,000 a tonne to ₹64,000/tonne in March on the back of a sharp increase in raw material cost. The hike comes after a ₹500/tonne raise implemented this month, with strong demand both in the domestic and international markets.
On the cost front, NMDC had hiked the price of iron ore fines (64 per cent Fe) to ₹3,910 a tonne in February, against ₹3,410 a tonne in January, while that of lumps (65.5 per cent Fe) was raised to ₹4,400 a tonne against ₹4,300 in the same period. Coking coal prices linked to Australia jumped to seven-month high of $346 a tonne.
Coking coal prices jumped 70 per cent from a low of $203 a tonne logged last August, amid concern of global economy slipping into a recession in the wake of a surge in energy costs sparked by Russia’s invasion of Ukraine.
“Steel demand in the domestic market has been strong from both the infrastructure and real estate sectors, despite the rise in interest rates. The automobile sector may see some slowdown, but they are sitting on a good order book,” said a steel company CEO.
Global steel price rally
Globally, steel prices have been rallying after China announced plans of a package for its ailing real estate sector and attempts to boost its domestic demand.
In China, HRC appears to be on a stronger footing with declining inventory amid expectations of favourable policies, said Amit Dixit, Research Analyst, ICICI Securities.
Besides, he said market participants expect steel prices to remain supported owing to the cost push and recovery in China demand.
India’s export price stood at $705 a tonne, the highest in the South-East Asian region, amid price increase of $25 a tonne by the Far-East players and $15 a tonne by Chinese and Russian companies.
In January, export volume rose 33.5 per cent month-on-month to 0.75 million tonne, the highest in the past eight months.
On the import parity front, domestic prices are at par and at a discount to the landed cost of imports from Far-East countries and China, respectively. Hence, there is no pressure on import in the near-term, he said.
While the real estate market in China is showing initial signs of improvement, more clarity on stimulus measures from Beijing is expected post Chinese New Year and their impact on the overall steel demand.
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