Steel prices rise with robust demand and raw material spike
Steel

Steel prices rise with robust demand and raw material spike

Steel prices in India had begun to strengthen. The report noted that long and flat prices had increased by 10% and 4%, respectively, over the course of the past two months. The report attributed this price surge to robust domestic demand and the recent surge in raw material prices. The report further explained that the domestic market had tightened due to a weaker monsoon and seasonal restocking, which allowed for price increases despite sluggish regional prices. In the past month, seaborne iron ore and coking coal prices had surged due to a combination of increased demand and supply issues.

The report anticipated that steel margins would strengthen in the short term, but it cautioned that cost inflation would necessitate further price hikes to maintain those margins. During the second quarter of FY24, domestic hot-rolled coil (HRC) prices had risen by 4%, while rebar prices had gone up by 10%.

It was observed that domestic prices were currently trading at an 8-10%premium to import parity levels, as Chinese export prices had remained relatively stable during this period.

Domestic steel demand had grown by 17%in August 2023 and by 13%in the first five months of FY24, surpassing Kotak's estimate of a 9% year-on-year growth in FY2024E. In the past month, seaborne iron ore and coking coal prices had increased by 5% and 24%respectively.

Iron ore prices had risen due to several factors, including the absence of steel production cuts in China, a three-year low in iron ore inventory at Chinese ports, and positive sentiment following stimulus measures related to the Chinese property market. Meanwhile, coking coal had witnessed increased demand in key markets, particularly India, coinciding with reduced supply from Australia, Canada, and Russia, resulting in a significant tightening of the market balance.

Steel prices in India had begun to strengthen. The report noted that long and flat prices had increased by 10% and 4%, respectively, over the course of the past two months. The report attributed this price surge to robust domestic demand and the recent surge in raw material prices. The report further explained that the domestic market had tightened due to a weaker monsoon and seasonal restocking, which allowed for price increases despite sluggish regional prices. In the past month, seaborne iron ore and coking coal prices had surged due to a combination of increased demand and supply issues. The report anticipated that steel margins would strengthen in the short term, but it cautioned that cost inflation would necessitate further price hikes to maintain those margins. During the second quarter of FY24, domestic hot-rolled coil (HRC) prices had risen by 4%, while rebar prices had gone up by 10%. It was observed that domestic prices were currently trading at an 8-10%premium to import parity levels, as Chinese export prices had remained relatively stable during this period. Domestic steel demand had grown by 17%in August 2023 and by 13%in the first five months of FY24, surpassing Kotak's estimate of a 9% year-on-year growth in FY2024E. In the past month, seaborne iron ore and coking coal prices had increased by 5% and 24%respectively. Iron ore prices had risen due to several factors, including the absence of steel production cuts in China, a three-year low in iron ore inventory at Chinese ports, and positive sentiment following stimulus measures related to the Chinese property market. Meanwhile, coking coal had witnessed increased demand in key markets, particularly India, coinciding with reduced supply from Australia, Canada, and Russia, resulting in a significant tightening of the market balance.

Next Story
Infrastructure Urban

Consistent reforms will foster growth and reduce investor risk

Incorporated in 1986 as a wholly owned subsidiary of State Bank of India, SBI Capital Markets Ltd (SBICAPS) is a SEBI-registered Category I merchant banker and research analyst. It offers the entire bouquet of investment banking and corporate advisory services under one umbrella, covering project advisory and structured financing, capital markets, mergers and acquisitions, private equity, ESG advisory, startup advisory and stressed assets resolution. Headquartered in Mumbai, SBICAPS has seven regional offices of which six are in India (Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata and New ..

Next Story
Infrastructure Urban

Adani Group Invests $240M in Global Skills Academy

The Adani Group has announced a partnership with ITE Education Services (ITEES) of Singapore to establish a world-class talent pipeline for industries such as Green Energy, Manufacturing, Hi-tech, Project Excellence, and Industrial Design. The initiative will see an investment of over $240 million by the Adani family to set up internationally benchmarked schools of excellence, named Adani Global Skills Academy. These finishing schools will train students from technical and vocational backgrounds, equipping them with industry-relevant certifications. Graduates will have employment opportunities..

Next Story
Infrastructure Urban

Swiggy to Invest $120M in Scootsy for Expansion

Food and grocery delivery giant Swiggy Ltd announced on Friday that it will invest up to $120 million in its wholly owned subsidiary Scootsy Logistics in one or more tranches. Scootsy specializes in supply chain services and distribution, including warehouse management, in-warehouse processing with value-added services, and order fulfillment for wholesalers and retailers. "We wish to inform that the Board of Directors of the company, at its meeting held on Friday, February 21, 2025, has approved the investment by the company in the equity shares of Scootsy Logistics Private Limited, a wholly..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?