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Steel price may move upward

Steel price may move upward
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Steel companies in India expect steel prices to rise in local market in line with global market because of spike in raw material cost. It may be mentioned that Indian steel prices are aligned to international prices.

According to CS Verma, Chairman of Steel Authority of India (SAIL), benchmark global prices of hot rolled coils (HRC) have risen $10 per tonne in the last one month.
Raw material prices are also climbing. From recent lows, iron ore prices have risen to $120-125 per tonne, while coal is up nearly $4-5 per tonne. In the domestic market, the third and the fourth quarters are likely to see a spurt in demand, he said.

Further, rise in demand for steel on the back of revival in passenger car demand may also exert upward pressure on steel prices reports suggest.

During September-October 2012, domestic steel prices have remained range-bound as weak global demand and the construction industry’s monsoon sluggishness caused a slide in prices.

Indian steel prices are likely to increase from November onwards led by the construction industry, which renews its activities after the lean monsoon season and with increased demand from the auto industry, Venkatesan Subramanian, director, metals & minerals practice, Frost & Sullivan said.

But analysts don’t expect that prices will rise significantly because of a considerable backlog of inventory from the last two quarters.

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