Steel prices may drop in next few weeks: Ind-Ra
New Delhi: Steel prices may drop in the next few weeks as there is no expectation of demand increase even though production will pick up with the removal of lockdown.
Thus, there will be oversupply of both hot rolled coil (HRC) and rebar. The realisation per tonne of steel minus raw material cost for types of steel will go down further in the July-September period of ongoing fiscal.
In the middle of last month-June, the realisation per tonne of steel minus raw material cost for rebar came down sharper than that of HRC because of higher fall in demand than available supply. The prices of HRC went down 3 percent and that of HRC by 4 percent in middle of last month. The prices of Australian coking coal in the middle of last month were lower by 17 percent as compared to the prices that were prevailing in December 2019. The fall in process was a result of global demand fall, together with Chinese import restrictions.
But the furnace production is increasing in China at a fast pace and that may result in increase in demand of Australian coking coal which may result in increase in prices of the Australian raw material.
The iron ore prices In India in the middle of last month stood as much as 31 percent lower than the prices in the middle of March. The prices have come down in India because of lower demand. The capacity utilisation in most plants is lower with high levels of inventory, said Ind-Ra in a report.