Operating conditions for steel manufacturers have deteriorated with a further fall in steel prices and rising coking coal prices. The demand environment continues to remain muted. Domestic hot-rolled coil prices fell by Rs 700 per tonne week-on-week to Rs 55,200 per tonne, said a report. The average price in September so far is 3% below the average seen in August.

Furthermore, margins are under pressure due to a sudden spike in coking coal costs following a brief period of softening trend. On the plus side, iron ore prices have remained constant.

Nonetheless, a significant increase in demand for steel is critical. Seasonality is predicted to be most severe in the September quarter (Q2FY23), with demand rebounding subsequently.

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