You are here: Home » Economy & Policy » News
Business Standard

Chinese demand drives domestic steel prices

After August 1, flat steel producers are planning another hike next month

Ishita Ayan Dutt  |  Kolkata 

Representative image
Representative image

Backed by strong demand from China, flat producers who raised at the beginning of August by up to Rs 3,000, one of the steepest in recent times, are mulling an increase next month.

Though it is not quite clear what the next round of increase would be, it is likely to be over Rs 1,000 a tonne. “The for the next month will be decided shortly,” a producer said.

If hiked by Rs 1,000 a tonne, then domestic (HRC) would come to around Rs 39,000 a tonne.

Since May, global have moved $100 a tonne to $548.

“While has remained strong in in 2017 so far, apparent domestic consumption, too, has grown more than the earlier expected levels. That, coupled with capacity rationalisation and a possible cut during the coming winter season, has led to international increasing sharply in the past three months,” Jayanta Roy, senior vice-president, Icra, said.

In the first six months, apparent increased 2.5 per cent, while rose 4.5 per cent. Moreover, had set a target of cutting supply by 50 million tonnes. Of which, 42 million tonnes has already been achieved.

The numbers show, unlike the past two years, there is a supply cut but is increasing and a lot of it is being absorbed in the home market. The primary reason why went crashing in the past two years was because of cheap imports from flooding

Back home, there is a marginal improvement in the demand scenario. According to Joint Plant Committee data, grew 4.4 per cent in April-July, compared to three per cent a year ago.

Industry sources, however, pointed out most of the spending was in government capex such as affordable housing, railways, wagons and locomotives and roads. The automobile sector has seen a steady uptrend, though.

Increase in raw material is another reason for the rise in prices; have moved from $145 to $195 a tonne, while have moved from $50 to $75 a tonne.

Infographics

First Published: Fri, August 25 2017. 00:43 IST
RECOMMENDED FOR YOU