As per Joint Plant Committee data, India's finished steel consumption grew three percent during April-November to 54.24 million tonne over same period of last year. Consumption in November stood at 6.12 million tonne, up by 3.8 percent from corresponding period last year but was down 14.3 percent sequentially.
Coking coal prices have come down to about $250 per tonne from peak levels of $320 but steel prices have enough headroom to increase, said industry officials.
"In December, domestic steel producers had raised product prices by seven-nine percent across all categories. In January too, it should be the same," said Peeyush Gupta, vice president (sales & marketing) at Tata Steel. " Though steel prices have been increased they are still lower than 2014 price levels," he added.
Apart from rise in coking coal prices, an uptick in international steel prices is also prompting domestic producers to raise product rates, said officials.
"Initially, the domestic industry took protection from the government since global prices were lower and dumping was happening in the local market. They raised prices then. Now, the industry is citing rise in global steel prices as one of the factors to hike product prices here. So basically, they have been raising prices all through," said a Mumbai-based trader on condition of anonymity.
Domestic steel industry has been enjoying protection from cheap dumping from China and other neighbouring countries in the form of safe guard and anti-dumping duties along with minimum import prices on select steel products.
Meanwhile, the industry sees the need for continuation of minimum import price regime on 66 imported products for six months as demand continues to remain disappointing.
"The full impact of MIP (minimum import prices) imposed on 173 products in February this year has not yet trickled down to boost domestic demand. Recent developments including liquidity crunch among consumers on account of currency demonetisation by the government as well as the imposition of anti-dumping duties on import of coke are expected to further dent demand and production situation, respectively," Sanak Mishra, secretary-general at Indian Steel Association (ISA) was quoted as saying in its recent release. The association represents 60 per cent of steel capacities in the country.
Naveen Jindal-led Jindal Steel & Power, Bhushan Steel, state-owned Steel Authority of India (SAIL) and Rashtriya Ispat Nigam are also among top producers of steel in the country.