Domestic steel prices have taken a tumble by ₹12,000, to ₹15,000 per tonne, specially for June deliveries, down 14–20 per cent month-on-month. This is amongst the steepest fall that domestic steel prices have witnessed over the last five to six months.
Poor demand, stock pile-up and a drop in iron-ore prices, apart from the overhang of another round of Covid-led disruptions in China and ongoing hit in exports are seen as sentiment dampeners.
They all fall down
According to trade sources, hot-rolled coil (HRC) prices for June deliveries stood at ₹64,000 per tonne, down 18 per cent m-o-m (₹78,000 per tonne). Rebar prices (landed) was down to ₹61,000-63,000 per tonne – a 15 per cent fall from their May prices of ₹74,000 per tonne. Wire rods saw a similar 15 per cent m-o-m fall in June to around ₹63,000 per tonne.
As per SteelMint report, rebar prices were down in most of the markets, while it added, trade discounts were given by Raipur-based heavy structural steel manufacturers and wire rod suppliers. “Market sentiments remain weak and bookings are not at a pace one would want. Many are awaiting further price decline before going for larger bookings. Monsoons are coming and this can lead to further price fall in longs because of delayed construction activities,” official of an Indian steel mill told BusinessLine.
Flat steel product prices, too, have seen some slide, but slower than previous week, primarily because of lower export offers.
According to trade sources, there is anticipation of another week-on-week decline in steel prices. Prices of raw materials like iron-ore and coking coal, too, are down. Iron ore prices (Fe 62 per cent) was trading at around ₹3,400-3,500 per tonne at the Odisha auctions; down nearly 24 per cent from ₹4,500-4,600 per tonne on May 27.
Similarly, for the Fe 63 per cent category iron-ore offerings (Odisha auctions), prices were down by around 7-8 per cent to ₹3,800-3,900 per tonne as compared to May 27 prices of ₹4,100 per tonne. “Lower sponge iron production and slow demand from steel mills added with poor response to pellet exports remain key factors,” said a trade source.
Global iron-ore prices, too, fell by $2 per tonne to $141 per tonne as apprehensions of Shanghai facing another round of mass Covid testing this weekend, following the discovery of new cases (days after it relaxed stringent restrictions), loom.
Imported coking coal prices have seen some decline, and are at $400 per tonne levels at present because of lower buying in India by sponge iron mills and higher production.
June 13, 2022