Steel products prices drops by 10%-15% to Rs 57,000 per tonne

Prices in the long products segment have declined about 10-15% to Rs 57,000 per tonne in the Kolkata market from a high of Rs 65,000 per tonne.

Steel sector players are witnessing challenges due to high input commodity prices as finished steel products have begun to decline in April after the Russia-Ukraine war.

Steel prices from leading players were at Rs 75,000 to Rs 76,000 per tonne.

Chairman of Steel Rolling Mills Association, Vivek Adukia, told the media that steel products like TMT bars and structurals have reduced to 10%-15% due to sluggish demand and are expected to ease more before it settles.

He said that costs have increased by 50% despite a compromise on the quality of inputs, while the secondary steel producers using Direct Reduced Iron (DRI) require high-quality thermal coal for making sponge iron. The imported coal price at $120 per tonne had increased to $300 per tonne after the Russia-Ukraine war.

According to Crisil's report, steel prices may trade at around Rs 60,000 per tonne by the end of the current fiscal year, down from the Rs 76,000 per tonne during the last month.

CEO and Managing Director of Tata Steel, T V Narendran, told the media that in India, the prices might reach Rs 8,000 to Rs 8,500 per tonne higher than in the fourth quarter, which will cover the cost increases due to high coal prices.

Koustav Mazumdar, associate director of Crisil Research, said that with the onset of the monsoon and less lucrative exports, the domestic steel prices should begin easing and move towards Rs 60,000 per tonne by March 2023, down from the Rs 76,000 per tonne, which will be well above the pre-pandemic levels.

Adukia said that steel companies are now forced to import coal as Coal India Limited (CIL) is not lending its ears to their demand.

He said that if coal prices in the international market do not drop, then 30%-40% of the secondary steel units will have to scale down production or close down. There are about 65 secondary units in West Bengal, with one lakh employment.

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Also read: India exports 13.5 mt finished steel worth Rs 1 lakh cr in FY22