India HR And CR Coil Prices May Fall In The Coming Months On Lower China Demand

India HR And CR Coil Prices May Fall

Prices Of Steel Might Ease Due To Lower China Demand: JSW Steel Joint MD Seshagiri Rao

The northward trend in prices of steel might end and might even backfire in the approaching weeks if the industry's anticipations of a potential revival in demand in the Chinese market (the most significant global consumer) stay unmet, joint managing director, JSW Steel, Seshagiri Rao.

Steel prices worldwide kept rising in the current weeks on the back of potentially higher demand from China as the nation relaxed its stringent Covid-19 curbs. Steel mills in India also spiked prices in tandem, coming to about INR 61,000-62,000 per tonne for benchmark hot-rolled steel coils. The regional costs were about INR 55,750-57,000 in January.

But from a contrarian view, Rao stated that regarding China presently concentrating on consumption-led development instead of investment-led growth, steel demand would be more down compared to market anticipations.

Request Access For Regular Price Update of Hot Rolled Steel Coil

The price hikes being witnessed currently all over the world are basically propelled by the re-opening of the Chinese economy as well as a change in the zero-Covid policy. However, this is only a blip, and there will be a price correction. There is already a proliferation of inventories transpiring in China.

As per reports, the Chinese infrastructure industry demand, which was on a debt-funded growth frenzy for the past few years, is slowing as well. The local government bodies in China that led the construction boom have felt under massive pressure to repay debt maturities, and lenders are not willing to bankroll anymore.

According to Rao, this will cause lower demand for steel from China.

A revision in the alloy's global prices could take place as soon as early this April.

One more crucial monitorable impacting the prices of steel in the approaching weeks will be the price of key inputs such as iron ore and coking coal. The coking coal prices have increased from about USD 275 per tonne to more than USD 350 in the last quarter. In a similar way, the prices of iron ore are hovering near USD 130 a tonne in contrast to USD 80 levels before.

These costs of raw material are also adding up to the prices of steel. As per Rao, he doesn't see a significant demand rebound.

Spot Prices of Stainless-Steel Dropped In the Past Week in the Bearish Market

Spot prices of stainless steel plunged in the previous week. A producer of stainless steel in south China rescinded the price limit, and traders presented quotes based on their in-plant stocks, which led to a panic in the industry. The difference in cold and hot-rolled stainless-steel prices recovered fast. The trades did not get better significantly since certain processing factories just restocked a little.

The agents were not inclined to pick up cargoes, and they concentrated on shipping the goods that were priced higher, which were stored earlier, causing a proliferation in the market supply. The overall inventory in the market is still elevated, which is improbable to be depleted in a brief period.

India’s Feb Output For Steel, Consumption Drops On Month

The finished production and consumption of steel in India fell in February from January, whilst the country stayed steel's net importer for the fifth consecutive month.

Imports of steel have surpassed exports in the last eight months by six times since lower international costs have turned imports tempting in the regional market. However, rising global prices will likely prevent steel inflow in the future months.

Imports were up during April-February, whilst exports were lower during the same period.

Exports got hit by a 15pc tax which was imposed by the government during May and November last year. Shipments were better as duties were removed, even though frail international demand, mainly from Europe, kept exports in check.

Read More About Hot Rolled Steel Coil Production Cost Reports - REQUEST FREE SAMPLE COPY IN PDF

According to the Procurement Resource article, the global steel industry market witnessed an upward trend on account of the soaring demand from China with the relaxation of the region's COVID-19 restrictions. Meanwhile, the prices of key feedstock, such as iron ore and coking coal, may add up to steel prices.

However, JSW Steel's Joint MD Seshagiri Rao expects steel prices to dwindle in the upcoming weeks if the anticipated recovery in Chinese demand does not meet the industry's requirements.

In India, the finished steel production and consumption declined in February from January 2023, whereas the region remained a net steel importer for the fifth consecutive month. Industry experts believe rising global prices will likely prevent steel inflow in the upcoming months.

real time graph

Track Real Time Prices

Hot Rolled Coil

Production Cost Report

Procurement Resource provides in-depth cost analysis of Hot Rolled Coil production, including manufacturing process, capital investment, operating costs, and financial expenses.



Get latest News About Procurement Resource
Subscribe for news

This site uses cookies (including third-party cookies) to record user’s preferences. See our Privacy PolicyFor more.