After witnessing a pause, steel and iron ore prices are now on the rise, as steel and companies have increased prices by up to Rs 5,000 a tonne beginning April. Steel producers told the media that hot rolled coil (HRC) prices, a benchmark for flat steel used in automobile, domestic appliances and construction, have been increased by Rs 4,500-5,000 a tonne. Prices of long steel, used in infrastructure and construction, have been increased by up to Rs 3,000 a tonne.

State-owned iron ore producer National Mineral Development Corporation (NMDC) has hiked lump ore prices by Rs 500 a tonne.

Post-increase, the price of HRC is at Rs 57,600 in long steel, TMT is at Rs 52,500. The increase in steel prices is led by a surge in global prices. The last time the price of steel increased was in January, when it touched an all-time high. However, it came off those highs as China moved into the new year holiday season under pressure from end-users in the domestic market.

Producers rolled over prices in February, and in the early part of March, prices dropped by about Rs 1,000 a tonne, but sentiments started improving towards the middle of March, and prices in the trade segment showed an upward trend.

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An India Ratings report said international iron ore prices in mid-March were around Rs 14,200 a tonne, Rs 580 a tonne lower month-on-month, but still at elevated levels, with prices in mid-March 2021 being 81% higher year-on-year.

NMDC had kept prices unchanged from February to the beginning of March. However, effective March 21, prices of lump ore and fines were revised upwards. Lump ore prices were increased to Rs 5,350 a tonne from Rs 5,100 a tonne and fines from Rs 4,200 a tonne to Rs 4,310 a tonne. Prices were increased again effective April by about Rs 500 in lump ore and Rs 250 a tonne in fines.

According to the India Ratings report, domestic pellet prices were at Rs 12,125 a tonne in mid-March, up by 5% month-on-month and 92% year-on-year. Domestic steel consumption over April 2020-February 2021 at 79.2 million tonne (mt) was down by only 8.8% despite Covid-19, reflecting the improving end-user demand, the India Ratings report stated.

Globally, measures in China are expected to support steel prices. China is looking to reduce its steel output to curb pollution, and according to the World Steel Association, its crude steel output stood at 83 mt in February, which was lower than 90 mt in January, even though year-on-year it was higher by 10.9%.

Meanwhile, steel companies Jindal Steel and Power Limited (JSPL) and Tata Steel have reported a 20% and 16% rise in sales in FY21. JSPL reported sales at 7.29 mt for the financial year ended 31st March 2021 with production up by 19% to 7.51 mt. Tata Steel reported an annual sales volume of 17.30 mt in FY21, up by 1% year on year (yoy). The company’s annual production came down by 7% to 16.93 mt in FY 21 as against 18.20 mt in FY20.

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