The Steel manufacturers have brought about a rise in the prices of steel for the first time in the last seven months in November, as the inventory at both the consumer and steel manufacturers’ end shrank after the recent pick-up in demand.
One of the major steel companies like JSW Steel has hiked prices of the hot-rolled coil by Rs 500-Rs 750 a tonne to Rs 35,500 and TMT bars by Rs 750-Rs 1,000 depending on quality specifications.
Jayant Acharya, Director (sales and marketing), JSW Steel, said, globally, steel prices have gone up by $20-$30 a tonne due to a production shut-down by most steel companies, as their selling prices had fallen below production costs. Inventory in China has also come down by 18 per cent or two million tonnes in the last two months. Steel production in China may slow down with the beginning of winter. As such the cost index is more or less similar to the 2017 levels, steel prices have fallen by over $100 a tonne to $430, from the level of $545 that prevailed two years back, he said.
Domestic prices at a discount to import prices
Besides the Rs 500-Rs 750 hike, domestically, HR coil is being sold at a discount to imports, he added. In India, the inventory with the dealer has dropped by 0.5 million tonnes in October, as steel demand increased by 3.9 per cent. Vehicle sales in October increased to 2, 85, 000 from 2, 23,000 in September; similarly, two-wheelers and commercial vehicles sales were up 6 per cent and 16 per cent every month, while the yearly comparison still remains a concern. After the monsoon, the construction activity has increased with higher allocation for both state and Central government-funded projects. On the packaging side, it is said the ban on single usage plastics has stoked demand for tin plates, where JSW Steel hiked capacity recently. On steel imports, also, globally, steel prices have fallen below the anti-dumping duty price of $489 a tonne and some shipments booked at higher levels were hitting Indian shores. It will be difficult for the user-industry to import steel when domestic prices are trading at a discount to the import price.