The volatility in steel prices is expected to continue in the medium-term due to the impact of geopolitical situation on supply chain logistics, which will further complicate the pricing situation for the user sectors like real estate, consumer goods and infra.
Recently, steel makers raised the prices of hot-rolled coil (HRC) by Rs 1,400 to Rs 60,700 per tonne from Rs 59,300 a tonne on February 22, according to a report by SteelMint, a research firm.
In the wake steel price volatility, the user industries have been witnessing price revisions on a regular basis.
Real estate sector is already grappling with higher steel prices. Automakers too have been under pressure to protect their margins in view of steel price volatility.
“The volatility in the prices is likely to continue in the medium-term on account of geo-political situations across the globe impacting the supply chain,” SteelMint said.
Recently, Steel Secretary Nagendra Nath Sinha spoke with ET NOW and talked about price volatility and several other aspects facing the steel sector. When asked if the Centre is planning to revisit the export tax on steel exports since steel prices are trending higher and China demand is opening up, Sinha said the government is monitoring the price situation but not contemplating on imposing any export duty at this moment.
Iron ore fines with iron (Fe) content of 62 per cent were moved up to Rs 5,480 tonne in February, from Rs 4,400 tonne in December 2022, data suggests. Similarly, imported hard-coking coal (HCC) prices increased steeply during this period.
Iron ore and coking coal are the two key raw materials required for steel manufacturing. While iron ore is sourced is available from domestic mines, for coking coal steel producers remain dependent on imports.
Any movement in prices of raw materials has a direct impact on prices of steel which ultimately impact the user industries like real estate and housing, infrastructure and construction, automobile and consumer goods.
