“We are looking at a price hike of Rs 500-750 per tonne from March 1 as global coking coal prices are up and we are about 10 per cent behind when compared to prices in March 2019. So there is room to push up prices,” informed Jayant Acharya, director commercial at JSW Steel.
Domestic steel producers have been raising prices continuously since November.
“Producers want to raise prices for March, but our sense is that there will be a rollover or, eventually, a rollback of price hike as the market is not in a position to take more increases at this juncture,” said a Mumbai-based trader on condition of anonymity.
spread has halted Chinese imports of intermediate material used by domestic auto players and white goods manufacturers, in turn impacting the domestic supply chain.
“Auto makers are dependent on China for certain auto components. These shipments have not been coming to India because of Coronavirus.
This is the situation with white goods category as well. So the demand for intermediate products here is also gotten affected,” said Nikunj Turakhia, president, Steel Users Federation Of India (SUFI).
India's steel imports, which were already weak due to the economic slowdown, have dried up completely since the Coronavirus outbreak in December, industry officials said.
As per the Joint Plant Committee (JPC) data, India imported 5.07 million tonnes of steel during April-November, down 5.3 per cent over the same period last year.
China's share in total finished steel import declined from 22 per cent during the period under review to 18 per cent, with volumes slipping by 19 per cent in April-November, said JPC data.
Meanwhile, domestic iron ore prices have also dropped due to decline of imports from China owing to Coronavirus outbreak.
According to NMDC investor's presentation, the Coronavirus outbreak that impacted the Chinese economy has led the iron ore prices drop to $83 a tonne since the beginning of February 2020 from earlier peak seen globally at $125 per tonne and $90 seen in recent past.
Analyst at Emkay Research expect iron ore prices in the international market to remain weak as production in China is unlikely to rebound in the immediate term.
Iron ore and coking coal are two key raw materials used in the making of steel.
Though there is a drop in demand for steel in the domestic market inventories of the alloy have also declined on year-on-year basis.
“It is the lower rate of growth of steel production which is showing fall in inventory despite a dull demand scenario,” said Sushim Banerjee, director general at Institute for Steel Development & Growth (INSDAG).
At the beginning of February, domestic steel inventory was 400,000 tonne lower from same period last year and about 200,000 tonne down from beginning of fiscal in April.
“The rate of growth of production in FY20 was at 1-2 per cent as against 4-5 per cent in FY19,” informed Banerjee.
Sajjan Jindal-led JSW Steel, Tata Steel, Jindal Steel & Power, state-owned Steel Authority of India (SAIL) and Rashtriya Ispat Nigam are the top domestic producers.
However, industry officials were of the view that the domestic demand scenario would be clear by mid-March as government spending on infrastructure projects is expected to pick up soon.
“The 6,500 projects across sectors under National Infrastructure Pipeline (NIP) is some hope for the industry and some action in this direction could come in the next few days,” said Banerjee of INSDAC.