Steel manufacturers hiked prices for the first time in the last seven months in November, as the inventory at both the consumer and steel manufacturers’ end shrank after the recent pick-up in demand.
Most steel companies, including 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 quality specifications.
Jayant Acharya, Director sales and marketing, JSW Steel, said, globally, steel prices have gone up by USD 20-USD 30 a tonne due to a production shut-down by most steel companies, as their selling prices had fallen below production costs.
Inventory in China has also come down by two million tonnes or 18 percent in the last two months. Steel production in China is also expected to slow down with the winter setting in.
While the cost index had remained more or less similar to the 2017 levels, steel prices have fallen by over USD 100 a tonne to USD 430, from the level of USD 545 that prevailed two years back, he said. Despite the Rs 500-Rs 750 hike, domestically, the hot-rolled coil is being sold at a discount to imports, he added.
In India, inventory at the dealer level dropped by 0.5 million tonnes in October, as steel demand increased by 3.9 percent. Passenger vehicle sales increased from 2,23,000 in September to 2,85,000 October; similarly, two-wheelers and commercial vehicles sales were up 6 percent and 16 percent month-on-month, while the year-on-year comparison still remains a concern.
Post-monsoon, construction activity has picked up with higher allocation for both state and Central government-funded projects.
On the packaging side, Acharya said the ban on single usage plastics has stoked demand for tin plates, where JSW Steel hiked capacity recently.
On steel imports, he said, globally, steel prices have fallen below the anti-dumping duty price of USD 489 a tonne and some shipments booked at higher levels were hitting Indian shores. It will not make business sense for the user-industry to import steel when domestic prices are trading at a discount to the import price.