Weak demand, oversupply, price drop to hit steel sector in Q2 FY21: Ind-Ra

Both HRC and rebar prices were down 3 per cent and 4 per cent month-on-month respectively in mid-June

Steel prices could fall further in coming weeks as domestic production will gradually increase with the easing of lockdown restrictions along with no corresponding increase in demand, according to India Ratings and Research (Ind-Ra).

As a result, domestic gross spreads per tonne -- that is realisation per tonne of steel minus raw material cost) -- for both hot rolled coil (HRC) and rebar are expected to fall further in the second quarter (July to September) of current financial year 2020-21 with a further fall in prices due to oversupply.

By mid-June 2020, rebar spreads corrected more than HRC spreads due to a