Falling demand to control soaring steel prices
Steel

Falling demand to control soaring steel prices

Skyrocketing steel prices are likely to face a headwind as demand takes a sharp hit from users due to Covid-induced restrictions.

Due to Covid-induced restrictions, the industry has suffered. When compared to March, finished steel consumption was down 23% last month, at 6.78 million tonne (mt). Steel consumption is expected to fall in the June quarter compared to the March quarter.

However, it will still be higher year on year because the country was completely shut down in the June quarter of last year. The second wave is expected to have an impact on auto and consumer durable demand, as well as delay construction and infrastructure activities.

However, strong export demand and higher international prices would allow steel producers to increase export levels, although high freight and shipping costs and container availability could be areas of concern, India Ratings said.

Domestic hot-rolled coil prices increased 3% month on month and 78% year on year in mid-May to Rs 65,250 per tonne. Similarly, domestic rebar prices rose Rs 3,000 per tonne month on month to Rs 56,000 per tonne in May. Steel prices rose as a result of increased export orders, which resulted in lower supply within the trade segment, strong global demand, and high international steel and iron ore prices.

However, domestic demand is likely to be subdued as a result of the lockdowns and increased infection rates, affecting auto and consumer durable demand, it said.

The recent drop in Chinese futures prices may have a short-term impact on India's export orders and domestic prices. Given the Chinese government's efforts to control steel prices and lower demand expectations as a result of the lockdown, domestic and international prices are likely to face headwinds, but would remain higher than pre-Covid levels, the rating agency said. In April, crude steel output was down 17% month on month at 8.3 mt due to steel companies diverting oxygen for medical purposes. On higher consumer demand, China's crude steel output increased 13% year on year in April to 98 mt. Despite the government's efforts to reduce annual output and reduce carbon emissions, output increased. In April, China's industrial output increased by 9.8 %.

Image Source


Also read: Rising steel, cement prices to impact real estate

Also read: NAREDCO seeks govt intervention to check rising prices of raw materials

Skyrocketing steel prices are likely to face a headwind as demand takes a sharp hit from users due to Covid-induced restrictions. Due to Covid-induced restrictions, the industry has suffered. When compared to March, finished steel consumption was down 23% last month, at 6.78 million tonne (mt). Steel consumption is expected to fall in the June quarter compared to the March quarter. However, it will still be higher year on year because the country was completely shut down in the June quarter of last year. The second wave is expected to have an impact on auto and consumer durable demand, as well as delay construction and infrastructure activities. However, strong export demand and higher international prices would allow steel producers to increase export levels, although high freight and shipping costs and container availability could be areas of concern, India Ratings said. Domestic hot-rolled coil prices increased 3% month on month and 78% year on year in mid-May to Rs 65,250 per tonne. Similarly, domestic rebar prices rose Rs 3,000 per tonne month on month to Rs 56,000 per tonne in May. Steel prices rose as a result of increased export orders, which resulted in lower supply within the trade segment, strong global demand, and high international steel and iron ore prices. However, domestic demand is likely to be subdued as a result of the lockdowns and increased infection rates, affecting auto and consumer durable demand, it said. The recent drop in Chinese futures prices may have a short-term impact on India's export orders and domestic prices. Given the Chinese government's efforts to control steel prices and lower demand expectations as a result of the lockdown, domestic and international prices are likely to face headwinds, but would remain higher than pre-Covid levels, the rating agency said. In April, crude steel output was down 17% month on month at 8.3 mt due to steel companies diverting oxygen for medical purposes. On higher consumer demand, China's crude steel output increased 13% year on year in April to 98 mt. Despite the government's efforts to reduce annual output and reduce carbon emissions, output increased. In April, China's industrial output increased by 9.8 %. Image SourceAlso read: Rising steel, cement prices to impact real estate Also read: NAREDCO seeks govt intervention to check rising prices of raw materials

Next Story
Resources

Madhya Pradesh Champions Inclusive Tourism at Heritage Sites

On the occasion of World Heritage Day, Madhya Pradesh is taking a significant step toward inclusive tourism by making its historical sites accessible to all — especially persons with disabilities. The state is rolling out its ‘Accessibility Infrastructure and Development’ project at Maheshwar, Mandu, Dhar, and Orchha, aiming to create a more welcoming experience at these iconic cultural destinations.The initiative, under the leadership of Chief Minister Dr Mohan Yadav and Tourism Minister Shri Dharmendra Bhav Singh Lodhi, includes infrastructure upgrades such as ramps, Braille signage, w..

Next Story
Resources

Runwal Realty Onboards Sonam Kapoor as Brand Ambassador

Real estate major Runwal has unveiled a refreshed identity as Runwal Realty, signalling a renewed commitment to crafting spaces that stand the test of time. With this refresh, the brand unveils its new philosophy: “Building for Generations to Come” and welcomes Bollywood star and global fashion icon Sonam Kapoor as its brand ambassador. This evolved identity reflects Runwal Realty’s commitment to creating not just homes, but heirlooms—crafted through visionary design, meticulous planning, global design expertise and an unwavering focus on quality. With the customer at its core, each de..

Next Story
Infrastructure Urban

Emerging Trends in Infrastructure and Transport 2025: KPMG

KPMG’s latest report, The Great Reset: Emerging Trends in Infrastructure and Transport 2025 edition, sheds light on the profound changes transforming the global infrastructure landscape. As industries adapt to the challenges posed by climate change, economic pressures, and technological advancements, the report identifies key trends and provides actionable insights for leaders in infrastructure and transport sectors. “In today’s interconnected world, the lack of standardized supply chain practices is not just an operational challenge—it’s an environmental and economic one. We’..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?