Steel costs surge to Rs 5,000 per tonne amid Russia-Ukraine conflict
Domestic steelmakers have increased the costs of hot-rolled coil (HRC) and TMT bars by up to Rs 5,000 per tonne as the supply chain is being affected amid the ongoing Russia-Ukraine conflict. After Russia invaded Ukraine, supply troubles have impacted global costs of wheat, soybean, fertiliser and metals such as steel, copper and aluminium - raising worries about costs and economic recovery. The costs have increased in the last few days and are likely to go up further in the coming weeks with the crisis deepening between the two nations. After the price update, a tonne of HRC will cost approximately Rs 66,000, while the buyers will obtain TMT bars for nearly Rs 65,000 per tonne. Meanwhile, the Nifty Metal index has increased about 12% in the past five trading sessions against a 2% drop in Nifty 50. Domestic brokerage house Motilal Oswal believes that approval of Russia will influence the costs of aluminium, nickel, steel, thermal coal, and PCI coal positively. India is a net exporter of aluminium and thus, the brokerage believes that firms like Hindalco, National Aluminium Company (NALCO) and Vedanta Group will benefit from the elevated aluminium costs. Whereas Coal India will be the largest beneficiary of a revival in coal demand, Tata is likely to be the biggest beneficiary of any steel cost increase in the EU. Motilal Oswal believes the approvals on Russia will lead to a disruption in the supply chain for certain commodities, and it may take up to certain months to reinstate the entire supply chain. Costs are likely to remain elevated until this is attained. Image Source
Also read: Steel sector ramps up exports as domestic demand slumps
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