Falling demand to control soaring steel prices
Steel

Falling demand to control soaring steel prices

Skyrocketing steel prices are likely to face a headwind as demand takes a sharp hit from users due to Covid-induced restrictions.

Due to Covid-induced restrictions, the industry has suffered. When compared to March, finished steel consumption was down 23% last month, at 6.78 million tonne (mt). Steel consumption is expected to fall in the June quarter compared to the March quarter.

However, it will still be higher year on year because the country was completely shut down in the June quarter of last year. The second wave is expected to have an impact on auto and consumer durable demand, as well as delay construction and infrastructure activities.

However, strong export demand and higher international prices would allow steel producers to increase export levels, although high freight and shipping costs and container availability could be areas of concern, India Ratings said.

Domestic hot-rolled coil prices increased 3% month on month and 78% year on year in mid-May to Rs 65,250 per tonne. Similarly, domestic rebar prices rose Rs 3,000 per tonne month on month to Rs 56,000 per tonne in May. Steel prices rose as a result of increased export orders, which resulted in lower supply within the trade segment, strong global demand, and high international steel and iron ore prices.

However, domestic demand is likely to be subdued as a result of the lockdowns and increased infection rates, affecting auto and consumer durable demand, it said.

The recent drop in Chinese futures prices may have a short-term impact on India's export orders and domestic prices. Given the Chinese government's efforts to control steel prices and lower demand expectations as a result of the lockdown, domestic and international prices are likely to face headwinds, but would remain higher than pre-Covid levels, the rating agency said. In April, crude steel output was down 17% month on month at 8.3 mt due to steel companies diverting oxygen for medical purposes. On higher consumer demand, China's crude steel output increased 13% year on year in April to 98 mt. Despite the government's efforts to reduce annual output and reduce carbon emissions, output increased. In April, China's industrial output increased by 9.8 %.

Image Source


Also read: Rising steel, cement prices to impact real estate

Also read: NAREDCO seeks govt intervention to check rising prices of raw materials

Skyrocketing steel prices are likely to face a headwind as demand takes a sharp hit from users due to Covid-induced restrictions. Due to Covid-induced restrictions, the industry has suffered. When compared to March, finished steel consumption was down 23% last month, at 6.78 million tonne (mt). Steel consumption is expected to fall in the June quarter compared to the March quarter. However, it will still be higher year on year because the country was completely shut down in the June quarter of last year. The second wave is expected to have an impact on auto and consumer durable demand, as well as delay construction and infrastructure activities. However, strong export demand and higher international prices would allow steel producers to increase export levels, although high freight and shipping costs and container availability could be areas of concern, India Ratings said. Domestic hot-rolled coil prices increased 3% month on month and 78% year on year in mid-May to Rs 65,250 per tonne. Similarly, domestic rebar prices rose Rs 3,000 per tonne month on month to Rs 56,000 per tonne in May. Steel prices rose as a result of increased export orders, which resulted in lower supply within the trade segment, strong global demand, and high international steel and iron ore prices. However, domestic demand is likely to be subdued as a result of the lockdowns and increased infection rates, affecting auto and consumer durable demand, it said. The recent drop in Chinese futures prices may have a short-term impact on India's export orders and domestic prices. Given the Chinese government's efforts to control steel prices and lower demand expectations as a result of the lockdown, domestic and international prices are likely to face headwinds, but would remain higher than pre-Covid levels, the rating agency said. In April, crude steel output was down 17% month on month at 8.3 mt due to steel companies diverting oxygen for medical purposes. On higher consumer demand, China's crude steel output increased 13% year on year in April to 98 mt. Despite the government's efforts to reduce annual output and reduce carbon emissions, output increased. In April, China's industrial output increased by 9.8 %. Image SourceAlso read: Rising steel, cement prices to impact real estate Also read: NAREDCO seeks govt intervention to check rising prices of raw materials

Next Story
Infrastructure Urban

TBO Tek Q2 Profit Climbs 12%, Revenue Surges 26% YoY

TBO Tek Limited one of the world’s largest travel distribution platforms, reported a solid performance for Q2 FY26 with a 26 per cent year-on-year increase in revenue to Rs 5.68 billion, reflecting broad-based growth and improving profitability.The company recorded a Gross Transaction Value (GTV) of Rs 8,901 crore, up 12 per cent YoY, driven by strong performance across Europe, MEA, and APAC regions. Adjusted EBITDA before acquisition-related costs stood at Rs 1.04 billion, up 16 per cent YoY, translating into an 18.32 per cent margin compared to 16.56 per cent in Q1 FY26. Profit after tax r..

Next Story
Infrastructure Energy

Northern Graphite, Rain Carbon Secure R&D Grant for Greener Battery Materials

Northern Graphite Corporation and Rain Carbon Canada Inc, a subsidiary of Rain Carbon Inc, have jointly received up to C$860,000 (€530,000) in funding under the Canada–Germany Collaborative Industrial Research and Development Programme to develop sustainable battery anode materials.The two-year, C$2.2 million project aims to transform natural graphite processing by-products into high-performance, battery-grade anode material (BAM). Supported by the National Research Council of Canada Industrial Research Assistance Programme (NRC IRAP) and Germany’s Federal Ministry for Economic Affairs a..

Next Story
Infrastructure Urban

Antony Waste Q2 Revenue Jumps 16%; Subsidiary Wins Rs 3,200 Cr WtE Projects

Antony Waste Handling Cell Limited (AWHCL), a leading player in India’s municipal solid waste management sector, announced a 16 per cent year-on-year increase in total operating revenue to Rs 2.33 billion for Q2 FY26. The growth was driven by higher waste volumes, escalated contracts, and strong operational execution.EBITDA rose 18 per cent to Rs 570 million, with margins steady at 21.6 per cent, while profit after tax stood at Rs 173 million, up 13 per cent YoY. Revenue from Municipal Solid Waste Collection and Transportation (MSW C&T) reached Rs 1.605 billion, and MSW Processing re..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement