Covid-19-led demand destruction, firm input costs to impact steelmakers

While realisations take a hit, pressure on margins may intensify with input costs remaining steady.

The outlook for domestic steel prices, which has largely remained firm till third week of March, now appears bleak. Domestic steel prices, which had been trading at a premium to international prices, will face pressure as the lockdown is leading to a build up of inventories. CARE Ratings says that the performance of domestic steel makers is likely to be adversely impacted in Q1FY2021 as a result of Covid-19 pandemic and the 21-day nationwide lockdown.

Just a few days ahead of the lockdown, steel prices in the month of March corrected 2 per cent, while those in Far Eastern