Steel prices in India are set to drop again by the beginning of next month. According to sources in the industry, items including TMT steel bars and galvanised steel could be cheaper by up to Rs 1,000 per tonne.
Hot rolled coils, a major component for these items, are currently trading between Rs 27,000 and 27,500 per tonne.
According to sources in the steel industry, hot rolled coil, a major component of commodity steel, has lost 3.8 per cent in the last month in North America and steel prices there have fallen up to $20 per tonne.
Indian trends in steel closely follow the trend in global prices.
Indian steel makers, however, feel this is a cyclical downturn. “We believe that steel prices will move up and down in a $25 price band. It could go up by that amount, or come down, but it will remain in that band,” said an executive with Ispat Industries.
The price of Shanghai hot rolled steel, too, has fallen by 0.4 per cent and is trading at 125,000 yuan.
According to industry sources, a major reason for the fall in Indian steel prices is the appreciation of the rupee against the dollar.
This, coupled with weak international demand, has pushed prices for imported steel southward. The China factor has also played a critical role. The Asian powerhouse, which has the highest demand for steel in the world, has curbed exports of steel.
This has meant that most of internally produced Chinese steel is finding its way back into the Chinese market. According to sources, China’s rate of growth in steel production is close to 18 per cent, while demand is growing at close to 9 per cent. This has further depressed steel prices there.
Steel export prices in Asia, however, are marginally higher than import prices. Hot rolled steel export prices were being quoted at $620 a tonne at the Singapore market on Wednesday.