Key Takeaways
- Indian steel prices expected to increase by around 3,500 rupees per ton in coming weeks.
- Higher coking coal costs and post-monsoon demand revival driving price hikes.
- Imports from China pose a risk to mills' pricing power.
Indian steel prices are anticipated to rise further in the coming weeks, according to industry executives and analysts. This increase is driven by higher coking coal costs and a post-monsoon demand revival in infrastructure and automotive sectors.
The price of hot-rolled coil (HRC) has already seen a significant rise, with a 4,000 rupee per metric ton increase between August and early September, reaching a four-year high, according to commodities consultancy BigMint.
Mills in India, the world’s second-biggest crude steel producer after China, have marginally cut prices of products such as HRC by 280 rupees per metric ton between June and July, government data shows. However, the overall trend is towards higher prices.
Vedant Goel, director at Enlight Metals, expects steel prices to increase by around 3,500 rupees per ton in the coming weeks. He attributes this to the significant share of coking coal in production costs, which mills are passing on to consumers.
Shankhadeep Mukherjee, principal analyst for steel at CRU, adds that the sharp price recovery has been supported by planned maintenance shutdowns, tighter spot availability, and lean distributor inventories.
An executive at a large steel mill, who was not authorized to speak to the media, agrees that further price increases are likely in the near term, supported by maintenance shutdowns, post-monsoon restocking, festive demand, project demand, and higher coking coal costs.
However, the rise in steel prices may be limited due to rising imports, especially from China. India imposed a safeguard duty on some steel imports last year to curb a surge in overseas shipments and launched an anti-dumping investigation in June into HRC imports from China, Japan, and Russia.
Despite these trade measures, imports have increased, with India being a net importer of finished steel between April and July, and finished steel imports rising 36.6% from a year earlier. China accounted for 31% of India’s imports, making it the largest supplier.
Fitch Ratings had warned in a report on September 1 that higher imports remain the key risk to margins, if competitive pressure resurges.
We expect steel prices to increase by around 3,500 rupees per ton in the coming weeks.
Vedant Goel, Director at Enlight Metals
Further price increases are likely in the near term, supported by maintenance shutdowns, post-monsoon restocking, festive demand, project demand and higher coking coal costs.
An executive at a large steel mill, Not authorized to speak to the media
