Indian steel prices fall on Chinese demand
Steel prices have taken a downslope after large steel manufacturers slashed prices of hot rolled and cold rolled coils by up to Rs 1,500 a tonne in the first week of March. This is the first significant price cut in the last nine months. JSW Steel, one of the largest producers of steel in the country, cut prices of hot rolled and cold-rolled coils by Rs 1,000 a tonne.
Domestic prices of hot rolled coil surged 54% year-on-year in the December quarter amid a robust recovery in domestic demand, similar to higher global steel prices. Those prices corrected themselves by 3% in mid-February this year to Rs 53,750 per tonne but were still 40% higher on a year-on-year basis.
A report from India Ratings and Research said domestic steel prices have reduced due to rising inventories with traders who are reluctant to procure steel at the high price levels since they have sufficient inventories, a slight moderation in demand from auto and pipe makers, and a disparity between the mill price and trade price.
Domestic rebar prices have also corrected due to the reduction in iron ore prices and increasing production by secondary steel producers. Domestic rebar prices in mid February were at Rs 48,800 a tonne, which is 9% lower on a month-on-month basis but 38% higher compared to the same period last year.
Experts believe that the Chinese demand is likely to remain largely stable in 2021 with the steady recovery of its economy, and that any production cut may lead to a price hike, which may force prices in India on the upward trajectory again.