The country has started to recover from the weak demand witnessed last year especially during the first few months of the financial year. The steel prices are set to increase taking into account strong demand and a surge in raw material prices.
Steel prices have increased in the last three consecutive months and a hike in February will be the fourth consecutive one. The steel prices are expected to increase by about Rs 2000 a tonne next month. Earlier this month the steel prices were increased by about Rs 1500 a tonne owing to surge in demand due to restocking by dealers and firm global demand. Hot-rolled steel prices have gone up by Rs 1,500 a tonne in January to Rs 37,500 which had been falling consistently since April and touched a low of Rs 32,500 a tonne in the month of September.
Domestic steel prices have gone up by Rs 1750 per tonne in the last two months due to strong global demand and a hike in global prices. The steel prices went up by Rs 500-750 a tonne in November followed by a rise of Rs 750-1,000 last month. China, which is the main driver of steel prices is pushing up raw material prices such as iron ore and coking coal. Steel produced in China is mostly getting consumed to fulfill its domestic need and its steel exports have fallen substantially. The global prices have increased due to the absence of dumping of steel by China.
The increase of global steel prices by more than 100$ has given domestic steel players enough headroom to increase their prices. At the same time, mining major has hiked prices such as NMDC, which has hiked iron ore prices by Rs 200 a tonne in January.
Iron ore prices rose by 14 percent to $106 per tonnes last month as against $96 logged in November. Similarly, coking coal prices had increased 10 percent to $145 a tonne as against $134 recorded in November.
With aggressive bidding taking place in the recent Odisha mining auction, iron ore prices are expected to get higher in the coming months.
