Steel companies have increased prices of flat steel products by Rs 500-750 a tonne and long steel products up to Rs 1,000 a tonne in November. Steel manufacturers have hiked prices in November, for the first time in the last seven months due to a decrease in inventory levels in both consumer and manufacturers’ end.
Steel manufacturers are witnessing a pick-up in demand. The prices of steel are showing signs of recovery due to pick up in construction activity post-monsoon and festive buying along with an increase in auto sales. Recovery in steel prices is largely due to higher international prices. Although, some industry sources, however, cautioned that the price recovery was supply-led and not demand. But they are hoping that a price hike of Rs 750 tonne may be possible in the next month also.
JSW Steel, have hiked prices of the hot-rolled coil by Rs 500-Rs 750 a tonne to Rs 35,500, and TMT bars by Rs 750-Rs 1,000, depending on the quality of the product.
Jayant Acharya, Director (sales and marketing), JSW Steel, said, globally, steel prices have gone up by $20-$30 a tonne due to a production shut-down by most steel companies, as their selling prices had fallen below production costs.
T V Narendran, chief executive officer and managing director, Tata Steel, said, “Scrap prices (ex-US) started moving up in early to mid-October, pushing up rebar and sponge prices. Also, stocks of steel are low in trade and consumer networks, as well as import volumes, have dropped. There are some positive signs from pre-festive buying and rural markets,”
Inventory in China has also come down by 18 percent or two million tonnes in the last two months. Steel production in China is expected to experience a slowdown in the coming winter months.
The inventory at the dealer end dropped by 0.5 million tonnes in October, as steel demand increased by 3.9 percent. The auto sector witnessed some positive sales with passenger vehicle sales in October increasing to 2,85,000 units from 2,23,000 units in September. Similarly, two-wheelers and commercial vehicle sales had witnessed a rise in sales by 6 percent and 16 percent respectively on a month-on-month basis, although on a year-on-year comparison the sales plummeted substantially.
Post-monsoon, construction activity has also picked up due to higher allocation for both state and Central government-funded projects.
