India’s steel producers hike prices again on buoyant demand

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Metal stocks on the Indian bourses are continuing their bull run, with steel companies announcing another round of price hike of Rs 1,500 a tonne for hot-rolled coil in January. Similarly, TMT rebar prices were hiked by Rs 2,400 a tonne as the demand from infrastructure and real estate projects is looking up.

The industry is preparing for another price increase of Rs 3,000 a tonne by mid-January as the domestic prices are still at discount to international rates .

The buoyant demand for metals across the globe on the back of raising raw material cost has enthused Indian metal companies to push up prices even as user-industries have criticised them for taking advantage of the situation.

Steel companies have demanded a ban on exports of high-grade fines and lumps export for six months to increase domestic supply. They want State-owned miners such as Odisha Mineral Company (OMC) and the Industrial Development Corporation of Odisha (IDCOL) to prioritise supply to domestic end-users over exports.

Steel producers have sought directions to OMC, OMDC and IDCOL to restrict their e-auctions of iron ore only for end-users such as pellets or steel manufacture in India.

The government policy reforms such as lower taxes, labour reforms, ease of doing business and digitalisation to make India attractive as a global manufacturing hub are improving the long-term steel demand outlook which is reflecting in the bull run in stock market.

The current stockmarket rally would sustain in the near term due to Chinese demand stimuli, artificial raw material shortages through restrictions on scrap imports. These factors are helping all the commodities, iron ore and aluminium, in particular. Chinese steel demand continues to surprise. Despite a 13 per cent growth in production, there has hardly been any increase in exports from China.

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