Steel prices in the country have come down in the last week of August amid a marginal fall in domestic and international iron ore prices and slower demand, but steelmakers expect rates to firm up soon on increased demand.
The benchmark hot-rolled coil (HRC) prices have come down by Rs 1,000, quoting around Rs 66,800-67,000 a tonne, down from Rs 68,000 in mid-August, industry watchers said. The prices had reached a peak of Rs 70,000-71,000 a tonne during July.
“There is a reduction in the prices in the trade market, but steel mills have not announced a price cut,” a senior executive at a top steelmaker told ET. “The prices did fall at the end of July and August. However, the demand is improving and we see prices firming up,” said the person who requested anonymity.
The fall in steel prices is unlikely to impact steel companies’ margins and spreads due to a steeper fall in the prices of iron ore, a key raw material for steel production, analysts said.
State-owned NMDC Ltd (formerly National Mineral Development Corporation) has cut prices of Fe 60 plus iron ore lumps by around Rs 600 per tonne since the beginning of June.
Data from steel research and analysis firm SteelMint shows that average Indian iron ore prices have fallen by around 25%. Fines of Fe 62% have come down from almost Rs 9,600 per tonne to Rs 7,000/t levels in Odisha, while lumps (5-18mm, Fe 63%) have ped more sharply from more than Rs 14,000/t to around about Rs 11,500-12,000/t in August, it said.
Japanese market research firm Nomura attributed steel price correction to a decline in global iron ore prices to $150 per tonne along with the normalisation of iron ore production to a pre-pandemic level.
HRC prices declined Rs 1,000 per tonne week on week to Rs 66,000-67,000/tonne in the week ended August 29 “on weak domestic demand and high level of inventory in trade channels”, Nomura said in a report on Monday.
“However, iron ore prices in Odisha have declined Rs 400/t w-o-w to Rs 8,100/t, partially offsetting the fall in steel prices and limiting the impact on steel spreads,” it said.
“However, rise in met coke prices by $29/t from $483/t also has an impact on spreads,” Nomura said.
( Originally published on Aug 31, 2021 )