Price versus demand

Indian primary steel mills have raised prices for Nov’21. Flat steel rates are up by INR 2,000-2,500/tonne. The reason is surging prices of input materials like coking coal, met coke and ferro alloys. Indeed, premium HCC Australian coking coal prices are up 257% in Oct’21 y-o-y while the HCC 64 mid-vol is up 214% in this period. Prices of both silico manganese (60-14) and ferro manganese (FC70%) are currently up around 30% since the third week of September. October too had seen a price hike — by INR 1,500/t in flats and around INR 3,500/t in longs.

But will the end-user segment be able to absorb the latest hike — especially since the domestic and export markets both look dull at present? Trade level participants say demand is low. Construction players say they are moving to the sidelines on rising steel prices.

In exports, China’s aggressively low rates are luring Vietnamese buyers while CIS and Russian mills are also actively selling to South East Asia. Europe may not open up very strongly from the new calendar because of the lean winter demand season. Moreover, too many exporting countries are eyeing the continent and thus prices may come under pressure. Our cover story takes a look at the short and medium terms.

Steel360 wishes its readers a very Happy Diwali.